Q I retired five years ago, leaving my 401(k) intact at my company. I have several more years to go until I reach age 70 1/2 - the time I will be required to begin withdrawals. I am thinking of drawing out some money now to pay for a building project at my retirement home. Would this money count as part of my required withdrawals when I turn 70 1/2?
M.L., via e-mail
A "Your distribution plan at age 70 1/2 will be based on what you have in the account then, not now," says David Bendix, head of Bendix Group, a consulting firm in Uniondale, N.Y.
If you take a withdrawal from your 401(k) now, you will have to pay taxes on the amount withdrawn, including interest earnings.
Instead, Mr. Bendix recommends you consider a loan from your 401(k), assuming your company will let you take one and you can repay it by the time you turn 70 1/2. Such a loan is not taxable.
Q My wife and I wish to invest some money in IRAs with a credit union. It appears that it is not insured by the Federal Deposit Insurance Corporation (FDIC), but by an agency called the National Credit Union Administration (NCUA). Is this agency as sound as the FDIC?
D.A., via e-mail
A The NCUA is an independent federal agency that supervises and insures credit unions. Deposits are insured up to $100,000, just as is the case with bank accounts insured by the FDIC.
The NCUA (www.ncua.gov) claims that no credit-union depositor has ever lost money on an account insured by their agency.
Q Several months ago I signed up for a load mutual fund, but I mistakenly picked the wrong share class. I signed up for an up-front sales charge, class A, but I wanted to sign up for a deferred-sales charge, class B. Can I switch without tax consequences?
G.D., New York
A The answer is usually no, but there are a few exceptions.
Pioneer Group, for example, will let you switch without consequence in the first week, a spokesman says.
Most fund companies suggest you check your fund application, or contact your fund company to see if you can make a tax-free switch.
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