Is it okay to roll my pension over to an IRA?
I am leaving a job and I have a large pension. I would like to roll it over to an IRA which has an average return of a 1/2% less then the pension, but will give me a lot more flexibility in retirement.
Yes, I highly recommend you "take the money and run". And yes, you can put it in an IRA. But note that an IRA is just a framework for investments, not a description for the type of investment itself. For example, your IRA can be a savings account at your bank or a mutual fund in stock. Unfortunately, there's too much missing info -- age, desired retirement age, risk aversion, retirement goals, dreams and needs, your opinion about current market conditions, etc. -- to provide a helpful recommendation here. Having said that, it's possible that an indexed strategy could be ideal for you, and actually earn MORE than your pension has been earning. I travel to Scottsdale for business on occasion, so let me know if you'd like to meet and chat in detail. Thanks! | 01.19.15 @ 07:44
I second Chris' sentiment in that there is just not enough information to provide you with a great answer. However, in general rolling a pension into a IRA is not a bad idea. You gain more control over your money and have the ability to earn higher rates of return with less fees. I am curious as to why you say you would receive a 1/2% less in return? Are you saying that the investments inside the account have earned less than your pension overtime? If so, what are you invested in? Then you have to ask yourself are those the right investments for you? Please clarify your question. Thanks! | 07.28.15 @ 19:57
Only if you have a very sound plan for what you will do with the money, and a withdrawal and investment strategy that gives you a high likelihood that you will never run out of money. Be very skeptical of complicated annuity products. Before you buy one, I would suggest an impartial review by a financial professional who is familiar with the products but is not selling them. You will also have to take into consideration your desire to leave something behind for your heirs (which would favor rollover rather than pension) and what other assets you have available (if you have other retirement assets, it might be nice to keep the pension income so you don't have to spend your assets down as quickly). I would advise having a discussion with an impartial financial planner who can weigh the pros and cons of each approach. | 10.07.15 @ 01:56
Quite a few things to consider, but I am a big fan of being able to control what you own. Sounds like you are considering rolling into something with a fixed rate (0.5% less than the pension). That doesn't sound flexible. Best to discuss. There are many options. Most important to me are ones that will provide you with a defense, as well as, an offense. | 02.09.16 @ 15:46
I guess I have to ask what do you mean by flexibility? What type of IRA (investment choice) are you looking at? Remember an IRA is a shoe box, what's inside of it? Losing half a percent is a lot to give up without good reason to. | 06.29.16 @ 00:38