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Started By
Message
re: IRA early withdraw to fund another. (Update)
Posted on 10/7/12 at 1:24 pm to SippyCup
Posted on 10/7/12 at 1:24 pm to SippyCup
If I have the following facts right, stop and do a little investigation before making a decision:
1. Wife's company usually matches "a high amount" of employees 401(k) accounts but did not match at all in 2012..
2. "Last week" the company announced they will match up to 15k of any contribution for the remainder of the year.
Wife's company had to be in a financial bind earlier this year because of not matching the contributions, and the company is now telling employees it will "match up to 15k of any contribution for the remainder of the year".
With the announced new match for the remainder of 2012, one of two possible scenarios are:
1. The company made such a turnaround in it's financial picture that it is now able to make this "too good to be true" match.
OR
2. The company is struggling to survive and by "matching" 15k of employee deferrals, it temporarily gets company off the hook with a horrible cash flow problem. $15,000.00 less per employee for paychecks from now through 12-31-12 would help any company with cash flow.
401(k) plans have government red tape a mile long associated with them on the employer's end. I wonder if the company made the required reporting as to altering the match percentage as it did at the beginning of 2012. Also, did the company again make the proper reporting to IRS to alter again their match percentage for the balance of 2012, and is it even legal for a company to do this? Trying to decipher 401(k) reporting requirements, match rules and regulations can make one nauseated reading them on IRS.gov.
Companies can do wonderful things with "constructive accounting" to make their financial picture bright...the situation just seems odd to me and personally, that would be the first hurdle I see in this matter.
1. Wife's company usually matches "a high amount" of employees 401(k) accounts but did not match at all in 2012..
2. "Last week" the company announced they will match up to 15k of any contribution for the remainder of the year.
Wife's company had to be in a financial bind earlier this year because of not matching the contributions, and the company is now telling employees it will "match up to 15k of any contribution for the remainder of the year".
With the announced new match for the remainder of 2012, one of two possible scenarios are:
1. The company made such a turnaround in it's financial picture that it is now able to make this "too good to be true" match.
OR
2. The company is struggling to survive and by "matching" 15k of employee deferrals, it temporarily gets company off the hook with a horrible cash flow problem. $15,000.00 less per employee for paychecks from now through 12-31-12 would help any company with cash flow.
401(k) plans have government red tape a mile long associated with them on the employer's end. I wonder if the company made the required reporting as to altering the match percentage as it did at the beginning of 2012. Also, did the company again make the proper reporting to IRS to alter again their match percentage for the balance of 2012, and is it even legal for a company to do this? Trying to decipher 401(k) reporting requirements, match rules and regulations can make one nauseated reading them on IRS.gov.
Companies can do wonderful things with "constructive accounting" to make their financial picture bright...the situation just seems odd to me and personally, that would be the first hurdle I see in this matter.
Posted on 10/7/12 at 7:01 pm to frb1951
quote:
If I have the following facts right, stop and do a little investigation before making a decision:
1. Wife's company usually matches "a high amount" of employees 401(k) accounts but did not match at all in 2012..
2. "Last week" the company announced they will match up to 15k of any contribution for the remainder of the year.
I wonder about this as well. Your hypothesis that the company is borrowing from future benefit obligations could be correct. It is hard to say for certain, but it does bear closer scrutiny.
Maybe she could make a small deduction and wait to make sure it is received by the 401 administrator reasonably timely before doing more.
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