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Retirement advice #5137574 06/18/19 01:10 PM
Joined: May 2011
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dja4260 Offline OP
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Joined: May 2011
Posts: 1,147
I have a retirement planner but would still like to get some feedback.

I currently have:

-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, I'll collect benefits upon retirement
-Life insurance policy that I can cash out at a determined age

My wife has:

-Years in a state-funded education retirement system, which will get a set amount, for life, upon retirement
-Pay into Social Security, Collect benefits upon retirement
-Roth IRA

My wife and I are moving funds from another state-funded retirement system. The years of service will not transfer cleanly into the state where we reside. My wife will have $25,000 PRE-tax, and I will have $22,000 PRE-tax.

If we move the funds into an IRA or Annuity, it's my understanding that we won't be taxed at the 20% rate.

Thoughts on what you would do with this money?


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Re: Retirement advice [Re: dja4260] #5137605 06/18/19 01:47 PM
Joined: Mar 2013
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skyactiv Online Content
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RED ALERT on the annuity. Salesmen/saleswomen at non fiduciary firms love to push them as they are usually the highest paying commission products they can sale.
They also have the highest complaints of any investment fund according to many state attorney generals.


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Re: Retirement advice [Re: dja4260] #5137607 06/18/19 01:49 PM
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Mr Nice Offline
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A mix of Vanguard low cost ETFs.

Annuities are crap, stay far away.

Re: Retirement advice [Re: dja4260] #5137640 06/18/19 02:22 PM
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Vuflanovsky Offline
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I think it would probably help the conversation if you stated what your advisor is suggesting and hopefully why...I don't dismiss the idea of annuities out of hand, but it's hard getting around the notion that for the vast majority of people they're probably not an ideal investment. There are people and portfolios where they do make more sense. However, with things like high surrender charges in x years beyond the high commissions, and confusing paperwork and prospectuses, they'd be my last option unless I was one of the rarer ones where they DID make financial sense and you understood why. Insurance products aren't really investments and are too restrictive in my mind unless it's something like permanent life insurance tied to long term care that's gained popularity in recent years.

Re: Retirement advice [Re: dja4260] #5137649 06/18/19 02:31 PM
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knerml Offline
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If you worked as a school teacher and get a pension, you are not eligible for a 401K.

As already stated, avoid annuities. Their costs are too high.


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Re: Retirement advice [Re: dja4260] #5137657 06/18/19 02:40 PM
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ArrestMeRedZ Offline
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Check into your Social Security eligibility and possible offsets from your state funded education retirement payouts. Many school districts are exempted from paying into SS, and when you start collecting SS your payouts are reduced by a "windfall" provision offset. If you and your wife paid SS tax on all your earnings this provision wouldn't apply.

The 20% held from your funds from the other state retirement program isn't your income tax on it, it is just the withholding on the funds if withdrawn. The actual tax may be much less, depending on your other income. I am in a similar situation, and intend to roll over a small Calpers balance into my IRA.

Agree with the comments above. Annuities rarely make sense to anyone but the salesman.

Re: Retirement advice [Re: dja4260] #5137659 06/18/19 02:42 PM
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dishdude Offline
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So you have almost $50k to rollover. My advice is roll it over into a Vanguard IRA, the current retirement provider can submit the check directly to Vanguard and you'll avoid any tax issues. It'll land in a settlement/money market account. From there, you can decide what to invest that money in. Simplest is a targeted retirement date fund (set it and forget it), otherwise you can consider what bond and index funds you're interested in or a combination of all three!

Vanguard has very low fees and is simple even for a novice.


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Re: Retirement advice [Re: dja4260] #5137660 06/18/19 02:42 PM
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Vern_in_IL Offline
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Well would an Deferred Long-term Care Annuity be better than long term care insurance?

I agree, stay away from annuities if you got a pension coming. I got *no* pension coming my way. :\

Re: Retirement advice [Re: dja4260] #5137664 06/18/19 02:48 PM
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Donald Offline
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Help us get a clearer picture. You worked say 30 years in state funded education and will get a defined pension from that. I don't think it matters where you live you will get the same pension. Its possible you could get hit with state income tax where you had worked.

Leave your wife's Roth IRA as is. Draw when you have to.

Cash our your life insurance and get a Roth IRA yourself.

Skip the annuity.

Hold off taking Social Security until FRA, preferably 70.

I would try to plan your lifestyle and budget on your pension and Social Security.

Save the money in IRA or Roth IRA or 401K, etc for medical emergencies. You will have them. If you have to start drawing, maybe put the money into a HSA?


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Re: Retirement advice [Re: dja4260] #5137703 06/18/19 03:36 PM
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Imp4 Offline
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Hey OP, you do realize that exactly zero people on this board (including me) are in a position to provide you with sound financial advise, right?!?


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Re: Retirement advice [Re: Imp4] #5137722 06/18/19 04:03 PM
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earlyre Offline
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Originally Posted by Imp4
Hey OP, you do realize that exactly zero people on this board (including me) are in a position to provide you with sound financial advise, right?!?


you don't know that with 100% certainty.... it's a worldwide public forum...his retirement planner COULD be on here...and who's to say that there's not a fiduciary or 2 on the board.. not everyone adversities their career on line...

me, personally... I'm the last person you'd want to take financial advice from...a 40yr old 3 time college dropout who has been at the same retail job since HS, and lives in his parent's basement...not to mention the horrendous CC Debt...

Last edited by earlyre; 06/18/19 04:06 PM.

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Re: Retirement advice [Re: dja4260] #5137723 06/18/19 04:05 PM
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PimTac Offline
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It is my interpretation that any money rolled over into a IRA Rollover account are not taxed but rules and time frames must be adhered to. In my case I took a lump sum from a pension. The pension plan sent me a check and I had a limited window to forward that check to a IRA provider to avoid the tax and penalty.

I am with the rest. Annuities are good money makers for the salesperson and the annuity company. Stay away from them.

Do your due diligence before making any decision. We do not know your specific situation. There are many variables that cannot be determined here without getting into your personal life.


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Re: Retirement advice [Re: dja4260] #5137726 06/18/19 04:14 PM
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JeffKeryk Online Content
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I use Schwab; I found them to be the most honest.
That's my best advice.


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Re: Retirement advice [Re: PimTac] #5137730 06/18/19 04:25 PM
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Silverado12 Offline
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Originally Posted by PimTac
It is my interpretation that any money rolled over into a IRA Rollover account are not taxed but rules and time frames must be adhered to. In my case I took a lump sum from a pension. The pension plan sent me a check and I had a limited window to forward that check to a IRA provider to avoid the tax and penalty.

I am with the rest. Annuities are good money makers for the salesperson and the annuity company. Stay away from them.

Do your due diligence before making any decision. We do not know your specific situation. There are many variables that cannot be determined here without getting into your personal life.

This is my understanding too. I have some variable annuities with Thrivent Financial and I honestly don't think it's a bad deal; just be careful which company you invest with.


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Re: Retirement advice [Re: earlyre] #5137732 06/18/19 04:26 PM
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Wolf359 Offline
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Originally Posted by earlyre
me, personally... I'm the last person you'd want to take financial advice from...a 40yr old 3 time college dropout who has been at the same retail job since HS, and lives in his parent's basement...not to mention the horrendous CC Debt...


Well at least you're not living in a van down by the river.

Anyway, it's not rocket science, as others said, you just roll the money over into an IRA, the specific thing to buy would be in depth financial advice but the basics of rolling things over from another account into the IRA is pretty basic.



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