Ask Terry Questions pension fund to IRA Rollover

pension fund to IRA Rollover

By Terry Savage on June 19, 2020 | Investments

My hospital was bought out and I have $57,000 in my pension fund and now I have to decide what to do with this money. I am 60 years old and not sure yet at what age I will retire. I have these options and wonder what you think is the best. Rollover to a traditional IRA, Rollover to Eligible employer plan, Rollover to Roth IRA, Cash payable directly to me, Split distribution: cash payable diretly to me (before taxes) and the remainder as a rollover to traditional IRA Roth IRA, Eligible Emplyoer plan. I have 2 other small pensions and will get social securty eventually. What is the best way to make use of this money. I have been advised to go to Schwaab, is this a good idea? What is your best advice. I have a month to make a decision. Thank you very much Ms. Savage.

Terry Says

Take Option 1 and do a direct rollover to an IRA — It will be considered an IRA rollover.
But that’s only the first step. The question now is WHERE to roll it, and WHO will give you investment advice! And that’s where most people get into trouble! Because there are plenty of unscrupulous advisors out there who want to make commissions and fees of your money.

So, if you were my friend, here is what I would tell you to do, exactly.
Contact Fidelity or Vanguard (1-800-FIDELITY) OR (1-800-VANGUARD) and tell them you want to do an IRA rollover. You can do that over the phone and get the process started. You do NOT take a check from your company; they will arrange a transfer.
THEN, you have to tell them how you want the money invested. Do something simple. Tell them that when they do the rollover you want it ALL put into their Treasury Money Market Fund. (No you won’t get much interest, but this will be simple.)
Once the money is in the money market deposit account, and after everything is set to go, contact them and ask them to transfer $5,000 into their Equity-Income fund.
THEN, tell them that every month on a specific date — same date every month for the next 10 months– you want them to transfer $2500 from the MM fund into the Equity-Income fund.

Make it automatic, despite what the stock market is doing. Then after 10 months you will be pretty well balanced out. Then stick with that plan till you’re age 72 and required to start withdrawals. You don’t need to pay anyone for this advice! All you need is the self-discipline to stick with this plan!!



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