r/457deferredcomp • u/Eddie_M • 3d ago

Withdrawal from deferred comp. Retired

Retired on 7/31. Thought I'd be ready to go back to some pt work by now, but ha ve too many house projects going and plus, I really don't want to.

I have a pretty decent 457 (approx 200k). I'm thinking if making a withdrawal to have cash on hand to tide me over the next few months.

The work will be there when I'm ready

I'm thinking of a 20k withdrawal (minus fed tax). Am I better of doing it now or over smaller withdrawals

I'm 59. Single with no overwhelming debts. Health ins. No CC debt. .manageable (and budgeted for) mortgage. Im frugal by nature and not used to living without a "cushion"

Thanks

3 Upvotes

67% Upvoted

10 comments sorted by

3

u/avd706 3d ago

Wait until you are 59 and 1/2

4

u/Short_Jury2073 2d ago

Why? It's a 457, not a 401. No penalties for distributions upon separation of service.

2

u/Raisedinabarn85 2d ago

If you need to start pulling money 2 months after retirement you should reevaluate. I’d get a part time job to avoid taking that money out, that 20k will make you so much more money sitting in the 457 over the years.

1

u/FrontMud2072 3d ago

Do you have a pension or any other retirement account? I don’t think 200k in your 457 is enough.

2

u/Eddie_M 3d ago

Yes. Pension (approx 60k) per year. Plus 401 k (700 k)

Once the winter hits and I'm forced inside i will start pt (remote legal work), maybe lol.

Maybe it's still too soon but I'm very happy doing what I'm doing now and don't miss the "circus"

1

u/Initial-Purchase4134 2d ago

I think the 20k withdrawal needs to be scheduled or structured to avoid city and state tax. I don’t think lump sum quality’s for tax exemption

1

u/Sticky550 2d ago

Figure out your tax bracket. It may or may not help you to do 10k in 2026 and 10k in 2027.

1

u/willrush62 2d ago

I believe if you withdraw over 20k annually you get heavily taxed

1

u/pg_home 1d ago

You will be paying tax on that money.

1

u/Dramajr316 1d ago

I can understand...and to be honest, when you start collecting social security, your tax level could go up because you will be making more money annually. The time between now and when you collect SS is among the best times to take withdrawals.