Ask Terry Questions Pension lump sum rollover

Pension lump sum rollover

By Terry Savage on October 19, 2019 | Financial Planning / Retirement

Hi Terry,

I’m 61 yrs old with a pension benefit from my job, which I left 29 years ago. I am vested and able to make a lump sum rollover distribution. I am not retired and would like control of the funds. Can I roll it over to a roth IRA? It turns out I have 65,000.00 and didn’t know until I asked for a statement of pension benefits.

Terry Says

Contact your former employer to see if a direct rollover to an IRA is allowed.  Most plans do allow this.  If so, contact Fidelity or Vanguard or T. Rowe Price to handle the rollover and make suggestions as to how to invest it.  If you do not do a direct rollover, you could be liable for taxes on ALL the money, so let the pros handle this!  ( I don’t see the point of making it a Roth IRA, and paying the taxes now.)  Just do a traditional IRA rollover and keep it growing tax-deferred until you reach the RMD age of 70-1/2.  You’re going to be glad you have this money working for you!

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