Announcement

Collapse
No announcement yet.

Fidelity Non-Governmental 457b Distribution mistake

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Fidelity Non-Governmental 457b Distribution mistake

    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?

  • #2
    Is it not too late to change given you have received the distribution?

    Comment


    • #3
      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

      Comment


      • #4
        Originally posted by Bmac View Post
        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?

        Comment


        • #5
          "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.

          Comment


          • #6
            Originally posted by FiPhysician View Post
            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.

            Comment


            • #7
              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.

              Comment


              • #8
                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

                Comment


                • #9
                  Originally posted by Lordosis View Post
                  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."

                  Comment


                  • #10
                    Originally posted by Larry Ragman View Post
                    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!

                    Comment

                    Working...
                    X