Can I keep some of the money?
May 19, 2009 8:28 AM Subscribe
PARS distribution questions -- I taught part-time for 10 years. Recently I realized that life is too short for doing that and so I've stopped. The school notified the PARS retirement and they want to distribute to me.
The estimated taxable portion is $3109 and the estimated non-taxable is $2817. Can I roll over to a traditional IRA with the $3109 and "spend' or put the $2817 into savings for a rainy day? What am I not thinking of?
The estimated taxable portion is $3109 and the estimated non-taxable is $2817. Can I roll over to a traditional IRA with the $3109 and "spend' or put the $2817 into savings for a rainy day? What am I not thinking of?
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Given that this appears to be a somewhat obscure area of retirement savings, you're probably best off asking an HR person or PARS administrator. Your PARS plan could be exactly the same as someone else's 401(K), but then again it might not be.
If it is similar to a 401(K) the tax implications of your choice will depend on your age. If you take a distribution before reaching a certain age, you have to pay early withdrawal penalty. To avoid that, you have to roll over into an IRA.
But again, this is all hypothetical, because I don't know the details of your plan.
posted by alms at 6:41 PM on May 20, 2009