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Retirement advice #5137574
06/18/19 02:10 PM
06/18/19 02:10 PM
Joined: May 2011
Posts: 1,104
Greenville, SC via Chicago, IL
dja4260 Offline OP
dja4260  Offline OP

Joined: May 2011
Posts: 1,104
Greenville, SC via Chicago, IL
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?


2013 Hyundai Elantra Gt Hatch 6 spd
2005 Toyota Highlander V6
1997 HD Sportster
Re: Retirement advice [Re: dja4260] #5137605
06/18/19 02:47 PM
06/18/19 02:47 PM
Joined: Mar 2013
Posts: 5,680
The Midwest
skyactiv Offline
skyactiv  Offline

Joined: Mar 2013
Posts: 5,680
The Midwest
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.


Wife: 15' Audi A4 quattro 6 speed manual
Me: 13' VW GTI 3 door 6 speed manual

Re: Retirement advice [Re: dja4260] #5137607
06/18/19 02:49 PM
06/18/19 02:49 PM
Joined: Sep 2004
Posts: 22,855
Central Florida
Mr Nice Offline
Mr Nice  Offline

Joined: Sep 2004
Posts: 22,855
Central Florida
A mix of Vanguard low cost ETFs.

Annuities are crap, stay far away.

Re: Retirement advice [Re: dja4260] #5137640
06/18/19 03:22 PM
06/18/19 03:22 PM
Joined: Dec 2014
Posts: 1,508
California
Vuflanovsky Offline
Vuflanovsky  Offline

Joined: Dec 2014
Posts: 1,508
California
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 03:31 PM
06/18/19 03:31 PM
Joined: Apr 2005
Posts: 711
NE Ohio
knerml Offline
knerml  Offline

Joined: Apr 2005
Posts: 711
NE Ohio
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.


2015 Hyundai Elantra Sport 2.0 GDI Mobil 1 5W30 & OEM/Mann W811/80 Filter
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Re: Retirement advice [Re: dja4260] #5137657
06/18/19 03:40 PM
06/18/19 03:40 PM
Joined: Nov 2008
Posts: 1,112
Las Vegas
ArrestMeRedZ Offline
ArrestMeRedZ  Offline

Joined: Nov 2008
Posts: 1,112
Las Vegas
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 03:42 PM
06/18/19 03:42 PM
Joined: Nov 2008
Posts: 9,972
Phoenix
dishdude Offline
dishdude  Offline

Joined: Nov 2008
Posts: 9,972
Phoenix
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.


2018 Challenger SRT 392 PUP 0w-40 Wix 57899XP
2018 GTI
Re: Retirement advice [Re: dja4260] #5137660
06/18/19 03:42 PM
06/18/19 03:42 PM
Joined: Jun 2014
Posts: 2,198
IL
Vern_in_IL Offline
Vern_in_IL  Offline

Joined: Jun 2014
Posts: 2,198
IL
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 03:48 PM
06/18/19 03:48 PM
Joined: Mar 2004
Posts: 22,479
Upstate NY
Donald Offline
Donald  Offline

Joined: Mar 2004
Posts: 22,479
Upstate NY
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?


2015 Subaru Forester 2.5 engine/CVT
2015 Ford F250 w/Powerstroke
2016 Subaru Crosstrek CVT (wife's)
Re: Retirement advice [Re: dja4260] #5137703
06/18/19 04:36 PM
06/18/19 04:36 PM
Joined: Apr 2018
Posts: 993
Somewhere in time
Imp4 Offline
Imp4  Offline

Joined: Apr 2018
Posts: 993
Somewhere in time
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?!?


2001 Mitsubishi Galant 2.4 - 165k+
Grandma's creampuff...
Re: Retirement advice [Re: Imp4] #5137722
06/18/19 05:03 PM
06/18/19 05:03 PM
Joined: Nov 2011
Posts: 4,252
Lima, Ohio, USA
earlyre Offline
earlyre  Offline

Joined: Nov 2011
Posts: 4,252
Lima, Ohio, USA
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 05:06 PM.

Mine:
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Re: Retirement advice [Re: dja4260] #5137723
06/18/19 05:05 PM
06/18/19 05:05 PM
Joined: Mar 2017
Posts: 10,005
...
PimTac Offline
PimTac  Offline

Joined: Mar 2017
Posts: 10,005
...
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.


2017 Mazda CX5
Havoline Pro DS 0w20
Roki OEM filter.
Re: Retirement advice [Re: dja4260] #5137726
06/18/19 05:14 PM
06/18/19 05:14 PM
Joined: Jan 2010
Posts: 1,694
Los Gatos, CA
JeffKeryk Online content
JeffKeryk  Online Content

Joined: Jan 2010
Posts: 1,694
Los Gatos, CA
I use Schwab; I found them to be the most honest.
That's my best advice.


2018 Tesla Model 3, Medium Range Battery
2018 Lexus RX450h
2013 Lexus GS350 F Sport
2006 Acura TSX
2001 Tundra Access Cab, 1998 Accord LX, 1968 Corvette L36 Roadster, 1965 Olds 4-4-2
Re: Retirement advice [Re: PimTac] #5137730
06/18/19 05:25 PM
06/18/19 05:25 PM
Joined: Feb 2013
Posts: 3,621
Central Virginia
Silverado12 Offline
Silverado12  Offline

Joined: Feb 2013
Posts: 3,621
Central Virginia
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.


12 Chevy Silverado ext. cab LS, 2WD 4.3 auto
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07 Harley Dyna Street Bob 96 c.i. 6 sp.
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Re: Retirement advice [Re: earlyre] #5137732
06/18/19 05:26 PM
06/18/19 05:26 PM
Joined: Apr 2012
Posts: 6,873
MA
Wolf359 Online content
Wolf359  Online Content

Joined: Apr 2012
Posts: 6,873
MA
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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