My employer offers a Supplemental Retirement Income Plan (SRIP) that allows me to contribute 10% after-tax income every pay period. This plan is a money purchase pension plan. It allows in-service withdrawals while still employed. Anyone familiar with this plan? I want to withdrawal after-tax contributions and roll it over to a Roth IRA. My questions are:
1) Should I withdraw only the after-tax contributions and roll over to a Roth IRA? Is this allowed? If I choose to roll over the investment earnings as well I will be subject to an automatic 20% federal income tax withholding, a 10% federal tax penalty, any applicable state tax penalties plus ordinary income tax.
2) Since contributions are taken out every pay period, I will have to do an in-service withdrawal every pay period to avoid any gains. Should I just leave the gains and worry about it after I retire?
3) Should I just do one big in-service withdrawal on after-tax contributions only and rollover into a Roth IRA at the end of the year? Not sure how to take advantage of the Roth IRA with this plan. Anyone have a better idea?
1) Should I withdraw only the after-tax contributions and roll over to a Roth IRA? Is this allowed? If I choose to roll over the investment earnings as well I will be subject to an automatic 20% federal income tax withholding, a 10% federal tax penalty, any applicable state tax penalties plus ordinary income tax.
2) Since contributions are taken out every pay period, I will have to do an in-service withdrawal every pay period to avoid any gains. Should I just leave the gains and worry about it after I retire?
3) Should I just do one big in-service withdrawal on after-tax contributions only and rollover into a Roth IRA at the end of the year? Not sure how to take advantage of the Roth IRA with this plan. Anyone have a better idea?
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