Should I roll my retirement into an IRA or leave it where it is at 6%.?

Question

I am no longer a state employee of CA. My retirement is sitting at 6%. I can leave it, roll it into an IRA or withdraw it? I'm only 31 and would like to leave it to avoid paying fees and penalties. Is 6% good or would and IRA be a better choice? Does and IRA require contributions?

Thanks Scott.

Answer 1

Me personally, I would roll it over as the market historically returns far better than 6% over the long term, like 30+ years.

Make sure you can do this as a direct rollover. You do not want to be cashed out or have any money coming to you, otherwise it becomes a taxable event with penalties.

An IRA does not require annual contributions. You can just transfer everything and let it sit and grow.

Contact a brokerage or mutual fund house and talk to them about doing this as a direct rollover. Make sure it can be done. They'll be able to guide you.

Answer 2

One nice thing about rolling them over is you have a lot more choice of where to invest. 6% is a terrible return.

I rolled mine over and picked 3 different mutual funds. This was about 4 years ago. My total investment is almost double what it was before I rolled it over. 96% return in 4 years. I was pretty lucky at choosing one really good fund that has been getting 40% returns though so I'm not saying you'll do that well and my one really great fund that I've been getting those returns on is considered a somewhat risky fund but I keep an eye on it and I can always move it to something else if it starts looking like it's not a great investment anymore.

Just make sure you do a direct rollover so you don't get hit with tax penalties.

Answer 3

It depends on the IRA you choose and how they invest your money. If you're only 31 you might want a bit more return for your money. I rolled my 401K into an IRA so I could have a bit more control over it. I'm presently on a middle of the road plan, not wild and not mild. My average return for the past two years has been around 12%. My advice would be to find a good financial planner (ask friends or your bank/credit union). Sit down with them, talk over what you have, what you want and when you'd like to plan on retiring so they can help you decide what's best to meet your needs. If you have kids and want to plan for their college bring that out also.
Good Luck.

Answer 4

If you are allowed (in some states, state employees are not allowed), you should definitely do a "direct transfer rollover" to an IRA. Any mutual fund broker can arrange it for you. They can also help you find some good mutual funds in which to invest...b/c 6% is a crappy return. Most states' plans are in ultra low risk funds...crappy bond funds, etc. In the real world, you should be able to get at least 10-15% annual return on your investments. Once you roll it over, you will still not be able to add to it, but you can always fund your current 401k/Roth 401k or another IRA or SEP or whatever you qualify for.

Answer 5

relies upon on yoru previous company's coverage's for terminated participant bills (they are in a position to make you pay your individual way yet maximum do no longer) and the money obtainable to you. that's something basically you may help you be attentive to. the elementary suggestion is to roll it over for greater flexibility and so on and so on and so on..yet certainty is that maximum people are not arranged to try this type of paintings. And..this is totally achievable which you would be able to have already got high quality funds with high quality fund agencies on your 401k. Blanket suggestion here isn't any good...you will could desire to analyze your funds your self. Write down the ticker symbols of your 401k investements...flow to yahoo and sort them in interior the ticker seek field of yahoo finance. whilst the fund comes up click on it and then click on the "profile" link. Over on the acceptable suited area in the direction of the backside you will see the rate ratios you're paying. you will additionally see if there are 12b1 funds being made and you will see if there are any a lot. in the journey that your rate ratios are low (<.seventy 5%) and there are actually not any 12b1's or a lot then you definately seem at overall performance. If the overall performance is robust in assessment to the fund classification then that's recommended to flow away them....yet whilst the rate ratios are severe (>a million.5%) and there are a lot??? flow your funds.... whilst retiring the ease is greater valuable for the IRA because of the fact they're greater valuable in a position to attend to installment funds. you do no longer choose lumpsum distributions as that willcontinual your tax fee up...particularly you opt to take distributions each and each year or month-to-month. IRA's structures are greater valuable in a position to realize that. in case you opt to retire early and take great ingredient approximately seventy two(t) that's periodic funds designed to sidestep the ten% penalty then you definately could flow to the IRA...maximum 401k's do no longer enable them. each undertaking is diverse...to offer you particular suggestion i could could desire to be attentive to what your funds are, what the money are at your present day company, despite in case you may opt to commerce in shares (i recommend against it) and how long till you intend on retiring. BTW, a good economic consultant will take your 401k's (how ever many there are) into attention whilst offering you with suggestion.

Answer 6

You are too young to be earning 6%. Don't withdraw it.
Be more agressive and roll into an IRA; you can get much more than 6% just with conservative stock mutual funds. Check out Vanguard.com or Fidelity.com, for starters.