TESPHE

[Lwoodbluz]

Can someone explain how a withdrawl of Teshpee works?

Are there only certain reasons you can withdraw your money?

Can you close your Tespee account and get your money out?

 

Any and All information would be helpful and greatly appreciated.

 

Thanks

[level]

Can someone explain how a withdrawl of Teshpee works?

Are there only certain reasons you can withdraw your money?

Can you close your Tespee account and get your money out?

 

Any and All information would be helpful and greatly appreciated.

 

Thanks

 

If you log onto www.fidelityinvestments.com you can create an account using your social security number and your hire in date as a pin. From there you can model different loans or withdrawls an read instructions on what qualifies. It is simple and self explanatory. The money can even be directly deposited directly into your checking account if you want.

[Lwoodbluz]

If you log onto www.fidelityinvestments.com you can create an account using your social security number and your hire in date as a pin. From there you can model different loans or withdrawls an read instructions on what qualifies. It is simple and self explanatory. The money can even be directly deposited directly into your checking account if you want.

 

 

I did that and got the packet today, and it looks like you can only get your money on a hardship withdrawl which has a list of only certain things you can take the money out for, and the reason I'm taking it out isn't one on their list. I find it hard to believe you can't get your own money back except for what they say you can have it for. I can't find anything about closing the Tephee and getting your money back or stopping your payroll deductions.

 

Thanks for your input

[bigredogre]

you can stop payroll deductions on yhere ,just change elections to zero.

you can take a loan ,but to close it out call them direct I belive it will be a pretty big tax penality due to the 401k tax exempt status of the fund.

[tbldbxorntnap]

I did that and got the packet today, and it looks like you can only get your money on a hardship withdrawl which has a list of only certain things you can take the money out for, and the reason I'm taking it out isn't one on their list. I find it hard to believe you can't get your own money back except for what they say you can have it for. I can't find anything about closing the Tephee and getting your money back or stopping your payroll deductions.

 

Thanks for your input

You can close out your TESPE account by calling them anytime, however if your not 59&1/2 years of age you are subject to a 10 percent penalty tax of the whole amount ,now on loans they do have three types to choose from personal, new home or improvement loan and finally the hardship loan. the personal is the easiest to get min $1000 to a max equaling half of your whole total the other two are harder to obtain because you have to provide documentation for, and god help you if you default on any of the loans as they will be quick to report you to the IRS.

[sinkinfast]

As long as you are employed with fomoco you cannot close your account. You can cancel contributions or take a loan.

[dark270]

As long as you are employed with fomoco you cannot close your account. You can cancel contributions or take a loan.

 

 

log into 401k.com

and read the rules for yourself!

Edited October 30, 2007 by dark271

[Lwoodbluz]

As long as you are employed with fomoco you cannot close your account. You can cancel contributions or take a loan.

 

I don't understand how they can keep you from getting your own money, I understand stand the taxes and the 10% penalty, but I thought you could take your money out if you paid the taxes and penalities, or I would have NEVER put my money in TESPHE, I can't believe you can't cancel your account and get your money.

[pointy]

Also IF you are laid off you CAN NOT take out a loan!!

[Lwoodbluz]

YOU CAN get your money you just have to pay the hefty taxes since it's a retirement account!!!

 

Just for everyone's info, I called today, you can only get your money out of Tesphe if you've retired, quit Ford are 59 1/2 or Hardship Withdrawl, the withdrawl can only be taken out for medical, death in family, home loan or improvement, school. My reason for wanting the withdrawl was start up cost on a business and this doesn't fall in their list, I did not understand this going into Tesphe or I would never have done it, I would have gone to my bank and done the retirement type things where I could have gotten it out if I needed it, by just paying penalities and interest.

[darkknight1955]

Can someone explain how a withdrawl of Teshpee works?

Are there only certain reasons you can withdraw your money?

Can you close your Tespee account and get your money out?

 

Any and All information would be helpful and greatly appreciated.

 

Thanks

 

You can take out a low intrest loan. go to www.401K.com and follow directions to set up your account. Then click on loans. There is a section where you can get a loan and you can do it all on line. They let you know how much you can get. I think it's something like half of what's in there. Not sure. And you can pick what the payments will be. It's all on the site.

[longball]

Be careful taking a loan from Tesphe....The cost is very high...First you pay like 8% to your self into your account...this is with after tax money....Then you will pay tax on the money again when you take it out at retirement....this could add up to like 60% interest on something that was originally tax free except at withdrawal 8+26+26

[Lwoodbluz]

Be careful taking a loan from Tesphe....The cost is very high...First you pay like 8% to your self into your account...this is with after tax money....Then you will pay tax on the money again when you take it out at retirement....this could add up to like 60% interest on something that was originally tax free except at withdrawal 8+26+26

 

 

I won't be taking a loan, and I stopped my payroll deductions, I will not put another penny where I can't get it when I need it. The Tax savings aren't enough in the long run for all the stipulations they have for withdrawl of money, then the loans aren't all they are cracked up to be.

[sinkinfast]

I won't be taking a loan, and I stopped my payroll deductions, I will not put another penny where I can't get it when I need it. The Tax savings aren't enough in the long run for all the stipulations they have for withdrawl of money, then the loans aren't all they are cracked up to be.

 

I'm assuming you started saving for retirement because you will need money for retirement and not becasue of the tax advantages. Remeber that point when you stop the deductions. Don't bank on the pension being there when you retire. I'm not making a prediction thats its going away in the next decade or anything but after that who knows.

 

All hourly people should be taking advatage and maxing out Roth IRA's prior to investing in TESPHE. Roth's are funded with after tax money and grow tax free. This advice would change if Ford offered matching contributions to our accounts.

 

95% of small business's fail in the first five years, mostly because of funding issue's. Consider it a blessing that you could not access your money at this point. I say NEVER borrow money to start a business.

Edited October 31, 2007 by sinkinfast

[Jimmy G]

If you've really got some stones, flip the stock. Leave TESPHE in place and play with the Ford Stock option. This is NOT for the squeamish! You can loose big time. You can also WIN big time.

[jeffjacob1998]

this is my first post so be kind to me. you can get a hardship withdrawl for the purchase of a new vehicle. you need the packet, which you already have, go to your ford dealer and get an estimate for a new vehicle. one that will cover however much money you need to take out "net." send it to fidelity and it will be approved. now there are alot of tax implications as already discussed. but, this is how to get your money.

[klutzys]

I won't be taking a loan, and I stopped my payroll deductions, I will not put another penny where I can't get it when I need it. The Tax savings aren't enough in the long run for all the stipulations they have for withdraw' of money, then the loans aren't all they are cracked up to be.

 

And the real KICKER is (and it is not on the website) you find this out when you call to confirm the withdraw, is that you get penalized for taking your money out EVEN for a hardship.

 

Meaning, you withdraw money to help with a purchase of a new home, as we still had another home and wouldn't get that equity until the house sold, so penalty is that you CANNOT MAKE any contributions to your account for 1 year after the hardship withdraw, and this is on top of paying the taxes.

 

So we have now hit our one year mark and can resume contribution if we choose. But boy was I PO'ed that this information was not up front on the website, but still would have had to do it.

 

So lesson is DON'T touch the TESPHE until your retire if at all possible.

 

TC

Edited November 1, 2007 by klutzys

[paris]

And the real KICKER is (and it is not on the website) you find this out when you call to confirm the withdraw, is that you get penalized for taking your money out EVEN for a hardship.

 

Meaning, you withdraw money to help with a purchase of a new home, as we still had another home and wouldn't get that equity until the house sold, so penalty is that you CANNOT MAKE any contributions to your account for 1 year after the hardship withdraw, and this is on top of paying the taxes.

 

So we have now hit our one year mark and can resume contribution if we choose. But boy was I PO'ed that this information was not up front on the website, but still would have had to do it.

 

So lesson is DON'T touch the TESPHE until your retire if at all possible.

 

TC

Newsflash: Tesphe was NOT SET UP TO BE A S&L. It's a RETIREMENT account. C'mon people.

[Pioneer]

\you get penalized for taking your money out EVEN for a hardship.

 

Of course you do. You never paid taxes on it to begin with.

[Indy]

Meaning, you withdraw money to help with a purchase of a new home, as we still had another home and wouldn't get that equity until the house sold, so penalty is that you CANNOT MAKE any contributions to your account for 1 year after the hardship withdraw, and this is on top of paying the taxes.

 

 

This may be a stupid question, and everyone's situation is different but why didn't you take out a loan for the purchase of your new home, make the payments for awhile and pay it off in a lump sum with the proceeds from the sale of your old house?

 

You would have faced no penalties or taxes, could've kept on contributing to the account, and the only money you would've been "out" would be the interest that you paid back to yourself...

[klutzys]

Of course you do. You never paid taxes on it to begin with.

 

Sheese people!

 

I am not an idiot but how many of you actually knew that if you withdraw from your TESPE for ANY hardship you where penilized by NOT BEING ABLE TO CONTRIBUTE FOR A FULL YEAR TO YOUR OWN DARN RETIREMENT ACCOUNT!!!

 

Oh yeah but I'm sure you both that responded so smartly are a bunch of rich folk NOT!!

 

We did what we had to do, and yes we have a big savings that we used along with the hardship loan. We had very specific reasons for wanting a larger down payment that I don't feel the need to tell you all about because your so almighty and knowing.

 

So get off your high horse. I was simply explaining to some folk that taxes are not the only penalty they will incure as I'm sure this is a detail MOST people DO NOT KNOW.

 

TC

[klutzys]

This may be a stupid question, and everyone's situation is different but why didn't you take out a loan for the purchase of your new home, make the payments for awhile and pay it off in a lump sum with the proceeds from the sale of your old house?

 

You would have faced no penalties or taxes, could've kept on contributing to the account, and the only money you would've been "out" would be the interest that you paid back to yourself...

 

Not a stupid question.

 

We were taking out a loan for the new home, we had 2 options, bridge loan or a seperate loan. We choose the seperate loan and wanted a bigger than normal down payment as you save on PMI and get a better mortgage rate, which is saving in the long run. We didn't consider the TESPE loan because we didn't know what to expect from the transfer from the St. Louis plant to KCMO plant & we where not willing to use all of our savings. We knew the house would sell but "when" and when we got a buyer we needed to move fast because of ours and their situation and well you know the housing market . People who expect to live on credit cards during hard times really pay for it down the road so we had spent the last couple of years liquidating large toys we didn't need. Like I said I didn't expect the NO CONTRIBUTIONS for a year part (and when we found out it didn't leave us much time for other options) besides have you seen the ridiculously high interest rates with a second mortgage. Man we were not willing to be caring 3 mortgages (or add another loan when we had been paying them off), but we where aware of the tax penalty so either way it was going to cost money.

 

Sorry for the long story. Did we make the right decision, probably not but it worked out for the best and we have used the money from the last year buy making our money market larger for god only knows what. You have to have both a retirement and a savings.

TC

[ande929]

Hey sinkinfast not ALL hourly should fund roth's first. It all depends on the household's income. If a spouse's earned income put's your jointly filed Adjusted Gross Income into the 25% tax bracket you should take advantage of the pre-tax savings until your AGI will fall in the 15% bracket. It is at that point you should fund your Roth IRA instead of 401. Married filing jointly AGI 15% federal is $63,700 for 2007 before you hit the 25% federal bracket. It's not always how much you can earn on your money but how much you can avoid getting taxed in the higher bracket. Rather have my family get any extra $ than the government mismanaging it. :reading:

[Indy]

Not a stupid question.

 

We were taking out a loan for the new home, we had 2 options, bridge loan or a seperate loan. We choose the seperate loan and wanted a bigger than normal down payment as you save on PMI and get a better mortgage rate, which is saving in the long run. We didn't consider the TESPE loan because we didn't know what to expect from the transfer from the St. Louis plant to KCMO plant & we where not willing to use all of our savings. We knew the house would sell but "when" and when we got a buyer we needed to move fast because of ours and their situation and well you know the housing market . People who expect to live on credit cards during hard times really pay for it down the road so we had spent the last couple of years liquidating large toys we didn't need. Like I said I didn't expect the NO CONTRIBUTIONS for a year part (and when we found out it didn't leave us much time for other options) besides have you seen the ridiculously high interest rates with a second mortgage. Man we were not willing to be caring 3 mortgages (or add another loan when we had been paying them off), but we where aware of the tax penalty so either way it was going to cost money.

 

Sorry for the long story. Did we make the right decision, probably not but it worked out for the best and we have used the money from the last year buy making our money market larger for god only knows what. You have to have both a retirement and a savings.

TC

 

 

Ah, I was just curious. Like I said, everyone's situation is different and you had a plant transfer in there to deal with as well which is most definitely NOT normal! (Well, it shouldn't be anyway!)

 

At least you were able to keep putting away the money somewhere, you're absolutely right about having to have both retirement and savings put aside. Especially now with everyone's future so up in the air!

[Quickdraw]

Hey sinkinfast not ALL hourly should fund roth's first. It all depends on the household's income. If a spouse's earned income put's your jointly filed Adjusted Gross Income into the 25% tax bracket you should take advantage of the pre-tax savings until your AGI will fall in the 15% bracket. It is at that point you should fund your Roth IRA instead of 401. Married filing jointly AGI 15% federal is $63,700 for 2007 before you hit the 25% federal bracket. It's not always how much you can earn on your money but how much you can avoid getting taxed in the higher bracket. Rather have my family get any extra $ than the government mismanaging it. :reading:

 

 

In your example I hope you understand that if you made $63,701 that that last dollar is the ONLY money that is taxed at 25%? Or if you made $64,000 then its only $300 taxed at the higher rate - not the whole amount.