Requested a withdrawal (over 59.5 so no issues of penalty) from a small
Was informed it was "the law" that would have to withhold 25%.
When informed other firms didn't require that, of course, the telephone robot couldn't do other than read the supplied script and claim infallibility.
This is internal procedure and subterfuge of using a convenient whipping boy of the IRS as an excuse rather than reality, correct?
It is likely that 20% withholding was required. I have no idea what you're talking about in your reference to "other firms," but if you're talking about IRAs the rules are different.
See the discussion beginning on page 8 of IRS Publication 575.
You might consider transferring this small 401(k) to an IRA, to avoid this annoyance. Joe
JoeTaxpayer wrote: ...
... Actually, that's precisely what I was referring to...I didn't realize there was a difference between the two in that respect and since the robot couldn't give me any reference, I assumed it was bs...
Actually, that is what I did for exactly that reason as the last straw; I was still curious, however... :)
Phil Marti wrote: ...
It would certainly be nice(r) if the Plan Administrators would train their representatives to at least have the references to what requirements are. They couldn't answer a single question wrt to the issue.
I see the 20% was, indeed, applicable, but Vanguard insisted they were going to withhold 25%. At that point since we pay estimates anyway and compute them on the basis of planned withdrawals it was simply intolerable so as noted in the other response just changed horses in midstream and initiated the rollover.
Thanks for the correct Publication reference...
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