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|Subject: Where to Rollover?||Date: 4/13/2011 10:33 AM|
|Author: NarnCeredir||Number: 68886 of 75637|
I will be beginning a new job this fall, and the main retirement vehicle is a hybrid pension system (the Wisconsin Retirement System -- I created a thread a month ago on this topic). I have close to $25,000 in a 403 (b) at my current university, and am seeking some advice on where I should move this money. I currently have a Roth IRA with Ameritrade, but am trying to weigh my options.
I could rollover these funds directly into the WRS, where I'm guaranteed by law a 5% return per year (and in the past 25 years the fund has averaged a 10.3% return per year). Additionally, my new university offers a 403 (b) as well as a 457. The 457 is most attractive, as if I opened an IRA, I planned on investing in Vanguard's Wellington Fund, which is offered as an option in the 457. There is an account maintenance fee of $1 per month, adding an additional dollar at $50,000, then $100,000, etc. The Wellington fund is of the Admiral Shares variety, though, so the operating expenses plus monthly fee would be less than if I opened a traditional IRA with a regular Wellington investment with Vanguard, at least for quite awhile. I'm not sure where the breaking point would be.
My other option is to open an IRA with Vanguard or to open an IRA with Ameritrade. I am correct in assuming that I cannot rollover my 403 (b) into my Roth IRA? I would like to keep contributing to whatever type of vehicle I choose, as my student loan repayments are based on my adjusted gross income, and thus I can significantly lower my AGI through investing in a 403 (b), 457, or traditional IRA. I do fall below the phaseout range for IRA deductions, and probably will for at least 10 years. One caveat is that I am not married, but this may change soon, and we would file our taxes married filing separately so that my student loan payments would not take her income into account. Then the IRA deduction wouldn't apply, as I believe the phaseout is in the $0 to $10,000 range.
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