State Retirement $$$ -> Rollover to Roth or Traditional IRA | TigerDroppings.com
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Sheep
USA Fan
In the beer room at Stein's
Member since Jun 2007
16423 posts

State Retirement $$$ -> Rollover to Roth or Traditional IRA

I've been grinding away for the past couple of years in state government, toiling away for YOUR tax dollars.

I've just been paroled into private industry.

What should I do with my meager retirement dollars? I'm not vested, so I'm losing the state's contribution.... the total amount is less than $10K.

Are there any tax ramifications I need to be concerned about with either a Roth or a traditional?

Love the show, thanks for taking my call, I'll hang up and listen.


TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
17387 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
ae you talking about a 403b or the DB pension plan?


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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7954 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
You can roll over any monies in your 457 plan if you have one but I'm pretty sure that you can't do that with your refund of contributions. Since those were tax sheltered you will have to pay tax on the refund. I'd call LASERS and get a definitive answer.


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Styxion
LSU Fan
Baton Rouge, LA
Member since Sep 2012
430 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
If it is anything like the city's retirement, a transfer of funds to a traditional IRA is a non-taxable event, so there should be no ramifications. Taxes would be taken out if you transfer to a Roth. However, if you take a check written to you, you will receive a 10% early withdrawal penalty.

source: i work for the city's retirement office
This post was edited on 10/10 at 11:40 am


Sheep
USA Fan
In the beer room at Stein's
Member since Jun 2007
16423 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
quote:

If it is anything like the city's retirement, a transfer of funds to a traditional IRA is a non-taxable event, so there should be no ramifications. Taxes would be taken out if you transfer to a Roth. However, if you take a check written to you, you will receive a 10% early withdrawal penalty.

source: i work for the city's retirement office


It's in TRSL. It's non-taxed money. I *assumed* that I would have to be taxed before putting it in a Roth, but wasn't certain.


Tiger4Ever
UTEP Fan
Member since Aug 2003
35936 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
Welcome to the club...I was paroled 3 months ago (probably not due to good behavior) and have about $27K still hanging out at LASERS.

I have a Roth, but will open a traditional to roll that into at some point I suppose.


Sheep
USA Fan
In the beer room at Stein's
Member since Jun 2007
16423 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
quote:

I have a Roth, but will open a traditional to roll that into at some point I suppose.


I'm just going to do it now, before I forget about it.


Tiger4Ever
UTEP Fan
Member since Aug 2003
35936 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
I hear ya..I just gave it time to make sure the transition was what I was hoping for...


Sheep
USA Fan
In the beer room at Stein's
Member since Jun 2007
16423 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
quote:

I just gave it time to make sure the transition was what I was hoping for...


I'm not going back!


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TheWiz
LSU Fan
NOLA
Member since Aug 2007
7735 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
I've been wondering the same thing about these plans. My wife is a resident at Children's NOLA; which is part of the LSU system. She is currently enrolled into the LA. Deferred Compensation Plan. Is the best thing for her to roll that moolah into a traditional roth? That's likely assuming we will be only eligible for traditionals at that point anyway.


Jake88
George Mason Fan
LSU/Saints Fan
Member since Apr 2005
11271 posts
Online

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
When did you get into LASERS? If you were in before, I think, 2004, and you leave it in there and return to state work, you get back in under the old retirement rules, that is, you'll get a percentage of your salary once vested.

Something to think about.


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Jake88
George Mason Fan
LSU/Saints Fan
Member since Apr 2005
11271 posts
Online

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
quote:

LA. Deferred Compensation Plan. Is the best thing for her to roll that moolah into a traditional roth?


Deferred Comp is not the same thing as LASERS. You should roll the Deferred comp to a traditional IRA. I don't think you can roll that into a Roth because a Roth is funded by dollars that have already been taxed. Deferred Comp is funded by dollars pre tax. The govt want their cut at some point.
This post was edited on 10/10 at 6:45 pm


BrandNew
Member since Aug 2010
330 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
You might want to consider the Louisiana income tax ramifications. Distributions from most Louisiana and city/parish retirement plans are not subject to Louisiana income tax. However, once you roll it over to an IRA, distributions are subject to Louisiana income tax when distributed from the IRA.


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TigerintheNO
LSU Fan
New Orleans
Member since Jan 2004
24222 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
quote:

It's in TRSL....I'm just going to do it now, before I forget about it.


I had to wait 90 days with TRSL, not sure if that is still the rule.


TheWiz
LSU Fan
NOLA
Member since Aug 2007
7735 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
That's what I was thinking. We should only be eligible for a Traditional IRA after she finishes residency and a specialty fellowhsip. Until then, we'll max out our Roth IRAs.


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rsande2
LSU Fan
Member since Jan 2006
3423 posts

re: State Retirement $$$ -> Rollover to Roth or Traditional IRA
quote:

I had to wait 90 days with TRSL, not sure if that is still the rule.


I did as well, I rolled mine into a traditional ira. Gives you flexibility down the road with no tax or early withdraw penalties. Plus my new job has a 401k so I wasn't going that route. I believe you can roll it over into any tax deferred plan though. And as some on here said, with a roth whether 401k or ira you would pay taxes on that money now, but not have to pay taxes from this point forward as a roth is tax free withdrawal.....amazing how little I had being vested and working there so long, I was disgusted!


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