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Author: MitsouR Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75335  
Subject: Question re: 'pension' disbursements Date: 5/13/2003 12:19 PM
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I used to work for MCI and recently got information from them regarding their now-defunct pension plan. Apparently I have a few thousand dollars in there and need to decide what I want done with it. I can take some sort of annuity which will give me something ridiculous like $36 a month after retirement. Or I can have the money disbursed into another retirement vehicle. I think I can have it disbursed into an IRA (not a Roth) or even my 401k.

I don't have a regular IRA currently (though I do have a Roth) and I do have a 401K.

Do you have any suggestions re: what's the best thing to do with this money?

One additional question - I used to work for the state and have gone back to work for the state. When I left originally, I took my 2 years worth of state contribution with me. I think I can buy back that time and may want to do so if it turns out I am working for the state again for enough years to make this worth my while. All contributions are pre-tax. If I roll the pension money into an IRA, can I later move some of it to the state retirement fund to buy back my time?

Thanks for any suggestions!!!!!
MitsouR
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Author: yobria Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36293 of 75335
Subject: Re: Question re: 'pension' disbursements Date: 5/13/2003 12:47 PM
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I read somewhere that 90% of pensions are taken as lump sums, and this is absolutely the way I would go, since you retain your principal as well as control over your money. Roll it into an IRA. Your SS income will provide the annuity portion of your retirement income.

Nick

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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 36298 of 75335
Subject: Re: Question re: 'pension' disbursements Date: 5/13/2003 3:12 PM
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<<Do you have any suggestions re: what's the best thing to do with this money?>>

See if you plan administrator will allow for it to rollover into your current 401k. If not establish a rollover ira. Remember you may have a 60 day window to complete this to avoid penalties.

2nd question- It depends on your state and plan administrator. Talk with them.

buzman


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Author: MarcoTheBeast One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 40519 of 75335
Subject: Re: Question re: 'pension' disbursements Date: 4/15/2004 4:31 PM
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Since the annuity value would be so low, you should definitely roll the money over into another savings vehicle. Among the IRA or 401(k), I would try to put the money into whichever account you pay more attention to. I tend to pay much more attention to my 401(k)since money goes in more frequently than my IRA. As a result, I have tracked the performance more closely and almost always achieved higher returns.

Marco

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