|T O P I C R E V I E W
||Posted - 03/01/2011 : 1:06:50 PM
My wife has two tax sheltered annuities that she started a few years ago with a financial advisor we really liked. A year or so after starting these accounts that advisor left the company and were were assigned a new one. We were not all that impressed and we stopped putting money into these accounts. They have just been sitting there making a modest profit but we would like to do something better with them. I cannot seem to get a straight answer from anyone as to what I can do with this money without being screwed by the IRS. Does anyone have any knowledge/experience with TSA's that they would not mind sharing? I would love to fold this money into her 401-K or something like that.
|2 L A T E S T R E P L I E S (Newest First)
||Posted - 03/08/2011 : 09:57:39 AM
I'm a Certified Financial Planner who's been in the financial services business for over 20 years, so I think I can help you with this.
Your wife's has a few options for her TSA,(also called 403(b)) plan.
#1 - Leave it where it is. PROS: May have lower fees than other account types since the fees are usually paid by the employer. CONS: You're at the mercy of the former employer as to what investment options are available to use. Also, in order to do anything with your account you have to go to your old employer to get it done.
#2 - Possibly roll it into her current 401(k). The IRS now allows for this, but not all 401(k) plans are designed to allow it, so you'll have to research whether or not hers does. PROS: Easier accounting since all her retirement assets would be in one place. Many 401(k) plans allow you take loans against your account. CONS: Like the current TSA, her employer makes the decision as to what investment options are available to use. Some 401(k) plans have great underlying investments, some don't. Also there are usually management/maintenance fees that are passed on to participants.
#3 - Roll it into a traditional IRA. PROS: You can control where it's invested. You can choose from many different options including stocks, bonds, mutual funds, CD's etc. You can choose who you'd like to manage your money. You are free to change investments/managers whenever you'd like. CONS: There are mainenance fees, (usually around $25-50/yr). No loans are available.
#4 - Roll it into a ROTH IRA. PROS: All your distributions after age 59.5 are non-taxable. This can mean more spendable cash in retirement. CONS: If you convert the TSA to a ROTH, you will have to pay taxes on the entire balance this year.
Hope this helps.
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf."
||Posted - 03/01/2011 : 7:25:27 PM
Dfreedom, gold seems to be doing well,seems like a safe investment especially with our economy built on a house of cards with 14 trillion in debt.