![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
Rolling Over Retirement Money
Dec. 27th, 2007 04:14 pmA very good thing to do when you leave an employer where you had a retirement account is to roll that account over into an IRA. This gives you a lot more control over your money and gives you a lot more options.
There are some exceptions, of course, but none of those apply to me. I finally rolled my pension money from when I worked for the state into an IRA. That money was earning 5% with no fees, which is actually pretty good, relatively speaking. Still, surely I can do better, right?
Now if I ever went back to work for the state, I could have used that money to increase my pension and retire more quickly. However, credit from my current job could be converted and the fine print of the rules means I currently have double credit for the short time I was at that state job, so I may as well cash out that extra money from the state and, if I get a job with them in the future, start over.
After rolling the pension funds into an IRA, I thought I'd like to convert the IRA to a Roth IRA. That means I pay income taxes on the money now but then I'm done paying income taxes on that money forever (according to current rules). The amount of money is low, so it's easy for me to pay all the taxes now (you can convert just part of it each year if you can't afford to convert the whole thing). I don't see income taxes as going anywhere but up the future (both tax rates and my income), so I may as well pay them now while they're cheap.
However, I waited rather late to even begin the process. Will I finish by the end of the year?
12/7-turned in form to state, requesting the rollover
12/12-received letter stating that my request had been approved
12/13-received another letter stating that I would be receiving a check
12/19-received check (to my broker for the benefit of me)
12/20-went to my broker with form to make sure I was doing everything right. I had the wrong form and learned I need the SSN of my beneficiary before I can fill out the form.
12/21-I had the number but forgot to bring it with me to work. That was the last of work this year.
12/27-went to broker again to turn in the completed form. He said I could fill out the conversion form online. I called my broker from home when I couldn't find it and he led me to it. Turns out you can't fill it out online, you can only find it online, print it out, and send it in, just like the other form. So I get to go back tomorrow. Wiener head.
If I do finish in time, I'm going to catch up on all my charitable contributions before the end of the year so that my deductions cancel out this pension income. If not, I'll catch up on all but this year's, and make those next month, again so that my deductions can cancel out the income from the conversion.
**
I had a lovely time riding the buses today. I got out in time to catch the 12:08 #37 Windsor Park to my broker downtown. Then I caught the first bus heading back north, the #1L Lamar, which let me off right at Wheatsville Food Coop. I bought too much stuff to fit into the backpack I brought and had to get an extra bag.
The walk from there to the #7 Duval was a lot longer than I thought it would be once I was carrying 30 pounds of stuff, but at least it was pretty. And of course the walk from where it dropped me off back home was longish and less pretty, but I was prepared for that.
And now I have macaroni and cheese and chocolate chips and sugar and paper goods and milk and yogurt and cheese.
There are some exceptions, of course, but none of those apply to me. I finally rolled my pension money from when I worked for the state into an IRA. That money was earning 5% with no fees, which is actually pretty good, relatively speaking. Still, surely I can do better, right?
Now if I ever went back to work for the state, I could have used that money to increase my pension and retire more quickly. However, credit from my current job could be converted and the fine print of the rules means I currently have double credit for the short time I was at that state job, so I may as well cash out that extra money from the state and, if I get a job with them in the future, start over.
After rolling the pension funds into an IRA, I thought I'd like to convert the IRA to a Roth IRA. That means I pay income taxes on the money now but then I'm done paying income taxes on that money forever (according to current rules). The amount of money is low, so it's easy for me to pay all the taxes now (you can convert just part of it each year if you can't afford to convert the whole thing). I don't see income taxes as going anywhere but up the future (both tax rates and my income), so I may as well pay them now while they're cheap.
However, I waited rather late to even begin the process. Will I finish by the end of the year?
12/7-turned in form to state, requesting the rollover
12/12-received letter stating that my request had been approved
12/13-received another letter stating that I would be receiving a check
12/19-received check (to my broker for the benefit of me)
12/20-went to my broker with form to make sure I was doing everything right. I had the wrong form and learned I need the SSN of my beneficiary before I can fill out the form.
12/21-I had the number but forgot to bring it with me to work. That was the last of work this year.
12/27-went to broker again to turn in the completed form. He said I could fill out the conversion form online. I called my broker from home when I couldn't find it and he led me to it. Turns out you can't fill it out online, you can only find it online, print it out, and send it in, just like the other form. So I get to go back tomorrow. Wiener head.
If I do finish in time, I'm going to catch up on all my charitable contributions before the end of the year so that my deductions cancel out this pension income. If not, I'll catch up on all but this year's, and make those next month, again so that my deductions can cancel out the income from the conversion.
**
I had a lovely time riding the buses today. I got out in time to catch the 12:08 #37 Windsor Park to my broker downtown. Then I caught the first bus heading back north, the #1L Lamar, which let me off right at Wheatsville Food Coop. I bought too much stuff to fit into the backpack I brought and had to get an extra bag.
The walk from there to the #7 Duval was a lot longer than I thought it would be once I was carrying 30 pounds of stuff, but at least it was pretty. And of course the walk from where it dropped me off back home was longish and less pretty, but I was prepared for that.
And now I have macaroni and cheese and chocolate chips and sugar and paper goods and milk and yogurt and cheese.