penguin Posted May 1, 2023 Share Posted May 1, 2023 Hi - wondering if anyone has the answer to a simple question. The Ford Stock fund in our 401k plans pays quarterly dividends based on "equivalent shares" that you own. It is different from normal dividends in that it is paid on the ex-dividend day, rather than the pay date. If you have any of the Ford Stock fund, you can see this is if you go into your account and check on activity. This last dividend was paid into the plan on 4/25 which was the ex-date as opposed to the normal pay date which is June 1. This is highly unusual and I've asked NESC why this is and I kind of got a non answer. My question is - If I elect to take the dividend in cash as opposed to reinvesting it, does that check get sent out right after the ex date, or does it get sent out with the normal checks on the pay date? Thanks all. Quote Link to comment Share on other sites More sharing options...
Dayshift Posted May 8, 2023 Share Posted May 8, 2023 Just a reminder dividends from a 401K are taxed at your full income tax rate not at the lower dividend tax rate of 15% (20% for higher wage earners. If you're still working where you have your 401(k) AND your plan allows what's called "in-service distributions," you could make withdrawals. But in addition to being taxable income, if you're under age 59.5 there'll also be a 10% federal penalty tax. You are much better off taking a tax free loan on your 401K and pay it back over time. Taking dividends in cash will cost you a bundle. Not sure about the ex-dividend date as I always reinvest the dividends. Sorry I was not more help Quote Link to comment Share on other sites More sharing options...
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