Quote:
Originally Posted by herekitty1960
I've recently had to leave my job of 15 years and apply for LTD. 
I have been contributing to my 401K for years and need to roll it over into an IRA. If I just close out my 401K I will take a huge hit on penalties for early withdrawl. I was told by Fidelity that an IRA was my best bet because I can put the money into a money market account and have access to it while still keeping it safe in a conservative account. And no penalties for withdrawl - I will have to pay taxes on anything I take out, though.
My question is - can I qualify for LTD and subsequently SSDI if I have this money? Should I just withdraw all of it and put it in my regular checking account? I just plan on leaving it there for emergency use if I need it.
I've never been good at making financial decisions by myself - and this time is no different. Since I now need every penny I can get my hands on I don't want to do something stupid and lose any of it. 
There's a lot of smart people on this board - I need your help!  |
I do not know the rules about SSDI and present income, but I do know with certainty that if you access you 401k before the age limit has been surpassed, you will be nailed heavily.
For example, if you wanted $20,000 after the penalty and taxes, you would only be able to realize $13,000. That is an instant loss of $7,000.
Financial advisors are usually not as smart as they act, and so there are very few of them that can help you without making a huge mistake.
Before you do anything with your 401k, read Ed Slott's books as they are the best I have ever read about the subject:
The author will show you how to CYA.
-Vic