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Dragonslayer
Senior Member
813 Posts |
 Posted - 03/08/2011 : 09:57:39 AM
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DFreedom,
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."
George Orwell
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TSA Money, What Can I Do?
