Company Split - Rollover Pension & DPSP to Roth IRA???

[MarkD]

The company I work for is splitting into two companies. My company is considered the "new" company so I have some decisions to make regarding my 401K, Pension plan, and DPSP (Deferred Profit Sharing Plan). I'm 10 to 13 years from retirement unless I hit the lottery.

My 401K will be transferred to the new company 401K, but my Pension plan and DPSP will show my status as Terminated. My separation summary says that I have the option to "receive my benefit (meaning Pension and DPSP) at any time if I meet eligibility requirements". I guess I have the option to move my 401K to another provider as well if I want if I understand correctly.

All the plans are managed by Fidelity. My company is offering free consulting thru Fidelity for advise on managing the funds. I'm just not sure what questions I should be asking other than potential landing points for my Pension and DPSP and the tax consequences. The separation document is lacking a lot of the details on potential options.

I think I'd like to rollover the lump sum payouts from both my Pension and DPSP into my existing Roth IRA. I used to read all of the finance blogs a long time ago but haven't kept up on all of the rollover options.

Is this possible?

Interested in any other thoughts out there. I think it is time for a fee-only financial adviser though.

 

[Matt]

The company I work for is splitting into two companies. My company is considered the "new" company so I have some decisions to make regarding my 401K, Pension plan, and DPSP (Deferred Profit Sharing Plan). I'm 10 to 13 years from retirement unless I hit the lottery.

My 401K will be transferred to the new company 401K, but my Pension plan and DPSP will show my status as Terminated. My separation summary says that I have the option to "receive my benefit (meaning Pension and DPSP) at any time if I meet eligibility requirements". I guess I have the option to move my 401K to another provider as well if I want if I understand correctly.

All the plans are managed by Fidelity. My company is offering free consulting thru Fidelity for advise on managing the funds. I'm just not sure what questions I should be asking other than potential landing points for my Pension and DPSP and the tax consequences. The separation document is lacking a lot of the details on potential options.

I think I'd like to rollover the lump sum payouts from both my Pension and DPSP into my existing Roth IRA. I used to read all of the finance blogs a long time ago but haven't kept up on all of the rollover options.

Is this possible?

Interested in any other thoughts out there. I think it is time for a fee-only financial adviser though.

Hard to say from just this, but there may be potential for some advanced strategies around these plans.. would require some digging. If you like, I can refer you to a guy I trust who has a firm, he would charge you a fee but it wouldn't break the bank. Or I'd also be happy to help you directly for no charge. I'm a fee only planner, I own a registered firm and i've passed the CFP exam, which is considered the highest bar in planning.

I know that some people may not want to cross the streams from the 'gig world' which is why I'd be happy to suggest people I know I trust (and charge a reasonable fee) but also, I just want to put out there that if you need some help, I'd be happy to give you as much info as I can since I appreciate your attitude around here, and it would be cool to see you retire asap, with the best possible solution.

 

[MarkD]

Thanks for the offer Matt. I sincerely appreciate your offer to help!

I have some homework to do. I'm going to call Fidelity and ask a bunch of questions and I'll consult with some others at work to compare notes.

I'd probably feel more comfortable working with someone local to the Sacramento area as I'd like to get my whole portfolio evaluated to make sure it is on plan as I head closer to retirement. The difficult part is finding someone local that I can trust who has my best interests in mind. I feel like I'm knowledgeable on the retirement savings and diversification areas but severely lacking on the tax/estate planning side.

If I don't find someone local then you will be the first person I call (and pay the market rate) for advice.