COVID-19 and 401K

[Anonymous]

So, I just recently changed jobs voluntarily, my wife however was laid off due to COVID 19 issues, she will be back to work more than likely in August..My question is, I have options with my 401k, I can roll it over to new employer or I can keep it where its at.

I have been reading about the rules for 401k and covid, its charged as income and normal tax rate with no penalty..etc..

One dream we have had was to use that money to purchase an RV after retirement, I think we are in a good position to just cash out and buy it now, we both are retired military and have those pensions as well as our VA benifits...

Should I do it....cash out?

[coldfusion]

---

@Anonymous wrote:

So, I just recently changed jobs voluntarily, my wife however was laid off due to COVID 19 issues, she will be back to work more than likely in August..My question is, I have options with my 401k, I can roll it over to new employer or I can keep it where its at.

I have been reading about the rules for 401k and covid, its charged as income and normal tax rate with no penalty..etc..

One dream we have had was to use that money to purchase an RV after retirement, I think we are in a good position to just cash out and buy it now, we both are retired military and have those pensions as well as our VA benifits...

Should I do it....cash out?

---

You do have a 3rd option which is the one I would normally recommend because it offers you the most flexibility - since you changed jobs you can roll over the funds in your previous' employers 401K distribution into a rollover IRA of your choosing at whatever institution you choose. You don't have to roll it over into your current employers plan.

I would not cash out without at a mininum being completely aware of all of the tax implications. 

[M_Smart007]

---

@Anonymous wrote:

So, I just recently changed jobs voluntarily, my wife however was laid off due to COVID 19 issues, she will be back to work more than likely in August..My question is, I have options with my 401k, I can roll it over to new employer or I can keep it where its at.

I have been reading about the rules for 401k and covid, its charged as income and normal tax rate with no penalty..etc..

One dream we have had was to use that money to purchase an RV after retirement, I think we are in a good position to just cash out and buy it now, we both are retired military and have those pensions as well as our VA benifits...

Should I do it....cash out?

---

I rolled a previous 401K over to Schwab.

I agree on not doing anything until you consult a Tax advisor and a good one.

I know someone who chose to rent an RV instead of buying it. I guess it depends on how much you would use it?.

The cost of registration, insurance, storage, keeping it clean, depreciating value and some other things were the determining factor.

[Citylights18]

I've done the rollover Traditional IRA thing many times and one thing it allows you to do is have full investment control over your money.

Most employer 401k plans require all or at least a portion vested into a mutal index fund which is limiting.

But yeah I would consult a tax specialist over what those implicaitons are for taking out money. With that many accounts I'd hire someone.