Fidelity Non-Governmental 457b Distribution mistake

[FiPhysician]

So I just got a check from Fidelity as a lump sum distribution of my non-governmental 457 within 90 days of early retirement. I had just talked to them last week. The 800 number and six transfers later, I got to the right "non-qual" person who could unlock the distribution options on the website. The next day that happens, and I put in for a 3-year distribution starting 2023 for the ~111k therein. Then I get the ~90k check in the mail (they held back 18% for taxes that will show up on a W-2 next year).

I planned to take it over the next three years hopefully while the TCJA is still in effect. I have some side income, but my wife's income will keep us in 35 or 37%. Add the ~33k a year for three years on top of that...

Compared to getting the money this year. This year I'll still have my side income, my wife had a better than average year (thanks to palladium prices), and I worked 3 Months as a doctor to fill up the 457 and 401k one last time (I'm 48 by the way). We are in the 37% for sure.

So 37% once now, or maybe 35 maybe 37% over the next three years? I'm overthinking this and I should just cash the check. Right?

[Bmac]

Is it not too late to change given you have received the distribution?

[Lithium]

When I put in for a NG 457b distribution it was over about 28 years. I didn’t think rates would go up that much after TCJA. I think the last year of TCJA is 2025. Between the two options you listed I’d do three years but obviously it will only save about $2k

[FiPhysician]

Is it not too late to change given you have received the distribution?

It is irrevocable, but it is clearly against the intent of the (I assume taped) phone call I had with Fidelity. I guess I could ask to listen to the tape and see if I asked for the distribution or asked for the ability to make a distribution election that I was told they would unlock for me online, which is my recollection of the conversation. If Fidelity screwed up, I bet they'd find a way to fix it. As long as I don't cash the check. But again, is it worth it since it saves me a couple of thousand in taxes over three years with the risk of TCJA going away before 2025?

[Tim]

"But again, is it worth it since it saves me a couple of thousand in taxes over three years with the risk of TCJA going away before 202?5?"
Might be worth a call to a FA? Sarcastic of course. Whatever you want.

[artemis]

But again, is it worth it since it saves me a couple of thousand in taxes over three years with the risk of TCJA going away before 2025?

I think that depends on how much hassle you're willing to go through in order to save a few thousand dollars in taxes. Everyone's pain threshold is different. I'd probably go through the hassle, but that doesn't mean you should do so.

[Larry Ragman]

Realistically, let it go. Not worth the peace of mind and aggravation it would cause. I say that even though I know this would annoy the heck out of me and I suspect I would be tempted to try to force them to fix it.

[Lordosis]

The right answer is to let it go.

But you are retired early with a ton of free time. Get on that phone and give them heck! Gotta have purpose in life :P

[Tim]

The right answer is to let it go.

But you are retired early with a ton of free time. Get on that phone and give them heck! Gotta have purpose in life :P

Make sure the phone rep treats you with respect! Crap, I got on their case about a free TurboTax deal. The only problem is they recognize your name and probably have a flag on the screen that says something like, "just say yes and the storm will blow over in a few minutes! This dude squeezes a Lincoln penny so hard that Lincoln cries."

[FiPhysician]

Realistically, let it go. Not worth the peace of mind and aggravation it would cause. I say that even though I know this would annoy the heck out of me and I suspect I would be tempted to try to force them to fix it.

I'm right there, too!