- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
what to do with a little retirement acct
Posted on 7/10/13 at 12:43 pm
Posted on 7/10/13 at 12:43 pm
have 27k in an old acct. with the state. they claim that, if i leave it in there til i'm 60, i will collect 700.00/month for the rest of my life. should i roll it into an IRA or wait 25 more years to collect the 700.00?
wwyd?
wwyd?
This post was edited on 7/10/13 at 1:33 pm
3
Posted on 7/10/13 at 12:48 pm to oldcharlie8
IRA
Posted on 7/10/13 at 12:48 pm to Janky
that's what i was thinking. thanks.
Posted on 7/10/13 at 1:23 pm to oldcharlie8
Wait, $700 per month or per year?
Posted on 7/10/13 at 1:28 pm to Broke
I would assume per month....
He can probably already pull 700 per year from it for the rest of his life
He can probably already pull 700 per year from it for the rest of his life
Posted on 7/10/13 at 1:32 pm to Broke
quote:
$700 per month
Posted on 7/10/13 at 2:02 pm to oldcharlie8
That's 8400 per year. You need to evaluate how well you think you can get the IRA to perform.
Posted on 7/10/13 at 2:04 pm to Broke
If he invests no more money, at a conservative 5% rate, that money grows to roughly $92,000 over 25 years. At a withdrawal rate of 5%, he gets $4600 per year. Far less than he would get keeping it there.
Posted on 7/10/13 at 2:10 pm to Broke
If he earned 8.5% (Dave Ramsey says 10% in a good growth stock mutual fund ), then $8400 would represent about a 4% distribution. I personally would rather take my chances myself as opposed leaving it with the state.
), then $8400 would represent about a 4% distribution. I personally would rather take my chances myself as opposed leaving it with the state.This post was edited on 7/10/13 at 2:11 pm
Posted on 7/10/13 at 2:16 pm to Broke
quote:
That's 8400 per year. You need to evaluate how well you think you can get the IRA to perform.
I agree with this. The other question is how old are you? If you're 59, you're probably not going to outperform what the state is offering. If you're 21, you could definitely outperform it.
Just a thought.
ETA: Oops...
quote:
or wait 25 more years
I don't know... I'd probably consider leaving it with the state. I would completely understand someone not having confidence in the long term sustainability of that program, but I personally wouldn't be overly concerned. I wouldn't mind a little peace of mind knowing that no matter what happens to my individual IRA, I have a fairly sure thing in a $700/month pension.
This post was edited on 7/10/13 at 2:23 pm
Posted on 7/10/13 at 2:50 pm to Janky
quote:
If he earned 8.5% (Dave Ramsey says 10% in a good growth stock mutual fund ), then $8400 would represent about a 4% distribution. I personally would rather take my chances myself as opposed leaving it with the state.
There are pluses and minuses with each side. It's not a slam dunk either way. So whatever he wants to do would be ok imo.
Posted on 7/10/13 at 3:19 pm to oldcharlie8
My wife was recently in a similar situation (in Mississippi). I was leaning toward pulling it out, but she wanted to leave it in. By leaving it in, if she goes back to the state she already has those years banked as far as credited service, plus the time for being fully vested has increased from when she started from 4 years to 8 years now. If you take it out and go back to the state, you have the option of paying the money back and getting your service years back. At least that's how I think it works. Reading through all the crap gave me a headache and I had too much going on at the time to really figure it out, so I eventually said to heck with it.
Posted on 7/10/13 at 3:20 pm to Janky
quote:
If he earned 8.5% (Dave Ramsey says 10% in a good growth stock mutual fund ), then $8400 would represent about a 4% distribution. I personally would rather take my chances myself as opposed leaving it with the state.
Actually dave says 12%
which is doable over a 25 year period, although I wouldn't count on it. But like you I'd rather take my chances at beating 8.5% than take my chances leaving it with the state, who is well-known for its ability to manage money and keep promises 
Posted on 7/10/13 at 4:02 pm to Broke
quote:
If he invests no more money, at a conservative 5% rate, that money grows to roughly $92,000 over 25 years. At a withdrawal rate of 5%, he gets $4600 per year. Far less than he would get keeping it there.
Not really a fair comparison though.
Why would you assume that he would only withdraw the growth?
I know that's the conventional rate, but the state plan sure as hell is dipping into that principal and gambling that he won't live to withdraw for much more than 20 years, letting them keep what's left.
Also, in your hypothetical one would still have 92000 in an account that could be passed on, whereas in the state account you'll have nothing.
These are very important additional points to consider...
This post was edited on 7/10/13 at 4:03 pm
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News