Author Topic: Should we rollover?  (Read 287 times)

knobtownmayor

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Should we rollover?
« on: February 22, 2021, 03:16:20 PM »
Hello

Us: Husband (36) and wife (30), three sons (6,3,1)

Gross Salary/Wages: ~$130k. Follow investment order fairly closely. <$10k school debt low interest.  Have ~$40k in emergency and planned spending (saving up for house).  Invest $2k every month between IRAs and brokerage totaling ~$120k. 

The Question: my wife has ~$35k in a public school retirement account sitting. I'm considering rolling over into her IRA but am a dunce about what this could mean and don't want to call up a college grad at some firm.

I understand that it can be done without penalty, but I want to understand possible downsides. To me, it seems that leaving it in this account making meager interest gains while it sources the retirement fund for current retirees is a not in *our* best interest.

zolotiyeruki

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Re: Should we rollover?
« Reply #1 on: February 23, 2021, 08:04:58 AM »
It depends on the details of DW's retirement plan.  Your best bet is probably to call up plan administrator.  Of course, they may not give you an unbiased answer, so you'll need to dig up the details about the plan yourself before calling.

Personally, I prefer to have the money under my sole control, which is why when I left my last job I immediately rolled the 401k into my own IRA.  There were no downsides--I called up Vanguard, they set up a conference call with the current plan administrator, and it was all taken care of in a few minutes.  It was a piece of cake.

travel2020

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Re: Should we rollover?
« Reply #2 on: February 23, 2021, 07:25:03 PM »
School retirement systems have different plans and sometimes guaranteed retirement benefits depending on service years etc. So depending on the plan option for your DW, years of service, future possibility of returning to a similar role, etc., you may be better off leaving the investment  in the plan.

Definitely recommend researching the plan and reaching out to the plan admin to clarify.

ixtap

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Re: Should we rollover?
« Reply #3 on: February 23, 2021, 07:35:34 PM »
Might she work in that school system (often by state, rather than district) again?

Do you expect your household income to increase in the coming years, such that the backdoor Roth might be appealing to you? If so, does your wife currently have a 401k that accepts rollovers?