What should I roll over my pension plan into?
January 23, 2008 4:14 PM   Subscribe

What should I do with the $5k I have sitting in the Teacher Retirement System of Texas pension plan now that I'm starting a new job with no retirement plan to roll it over into?

There are talks of getting a 401(k) plan set up at the new job, but I'm not sure when that will happen. In the meantime, what's the smartest, financially-responsible thing to do with the 5k? (If it matters, I'm in my mid-20s, single, working full-time, paying off a new car, and planning on going to grad school part-time in the next couple of years.)
posted by lychee to Work & Money (8 answers total) 1 user marked this as a favorite
Get an individual IRA through a financial institution, and roll it over into that.
posted by SpecialK at 4:18 PM on January 23, 2008

(And btw, if you used to work for UT -- Gig 'em, Aggies. :D)
posted by SpecialK at 4:18 PM on January 23, 2008

You can roll it over into a traditional IRA, or else take the tax hit on it and roll it over into a Roth IRA. The Roth may actually be your best choice since you are probably making much less now than you will later in your career, putting you in a lower tax bracket now than at retirement.
posted by kindall at 4:22 PM on January 23, 2008

What would the return be if you just left it there to grow until you retire?
posted by gjc at 7:33 PM on January 23, 2008

or leave it w/ TX Teachers if that's an option! They're one of the best institutional money managers around...

and I'm not even going to address everything that's wrong with that aggie comment...
posted by ziegenRAWK at 7:34 PM on January 23, 2008

What were the circumstances that you paid into TRS? If you are a teacher, or it was any type of job you might return to that would pay into TRS, I'd leave it there.

nthing the gig 'em aggies.
posted by tamitang at 8:57 PM on January 23, 2008

I had about 5K in TRS, I worked staff positions in a couple university libraries. After I left university work I left my $ in TRS for 2 years, because if you take your money out of TRS and then return to a state job with TRS you will have to repay the amount you took out. I only took my $ out for house purchase needs. Took a hit on tax and early withdrawal.
Leave it until you really need it.
posted by sailormouth at 9:44 PM on January 23, 2008

No need to move it unless you can get a better return somewhere else.
posted by Pants! at 8:07 AM on January 24, 2008

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