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| Subject: IRA to Pension Plan? | Date: 1/27/1998 11:50 PM | |
| Author: DonRobin | Number: 1571 of 118719 | |
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Please excuse a silly question from a new fool! My mother needs to buy back several years in a state employees pension plan but is having trouble raising the necessary capital. She has enough in an IRA to cover the bill but the plan admin has informed her that they won't accept a rollover check (that the IRS forbids this type of transfer). I'm not sure I understand this... Can she take the distribution - 20% withholding, pay off the pension buy back, and deduct it? The extra $ she earns in retirement form the comes out to $315/mo if she buys back the years so I'm thinking that the $6000 she needs to spend to buy back the years is worth it (19 month recoup not including IRA growth). It would be worth it to pay the penalty and taxes on the early IRA distribution (she's 54) to go into the pension, but we're looking for the least expensive method. Refinancing her house is an option, but then it's a comparison between tax/penalty vs. closing costs. Any help would be greatly appreciated! -Don Robin |
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