My husband recently was laid off. The job he left had provided a simple IRA and now we have to decide what to do with it. Our choices are 1) leave it and hope it doesn't all disappear. most of the funds have been invested in real estate. 2) request a disbursement and loose 10 percent of it, plus pay income tax on the amount we do receive.
what would you do? leave it and hope for the best? Or pay the fees and invest it somewhere else? or pay the fees and open a savings account that has a nice interest rate?
I am no expert on this or any other subject. But, that does not stop me from having an opinion which I offer to you free of charge. (That's probably what it's worth!) You should speak to a professional. There is an awful lot at stake.
It sounds like you have a traditional IRA and not a Roth. I hope you don't need the money and are not planning to retire soon because I think the funds are better off where they are. You have other options: (1) you can roll it into another IRA account with another institution or employer without paying penalties and taxes. If, for example, you choose to roll it into an IRA brokerage account, you can diversify and still have complete control over the management of your investments. (2)If you still have a good number of years before you plan to retire, then be sure to explore the option of rolling your traditional IRA into a Roth IRA. If you do, you will have to pay income tax on the rollover BUT the amount rolled over and ALL future growth will compound tax-free even when you eventually withdraw it.
I wish you both much luck. Q.
I guess I need to look up the differences between types of accounts. I know next to nothing on this subject. His new employer does not offer any type of retirement, so we would be on our own and I have on idea where to begin. No, we don't need the money now, and still have a good thirty years to retirement, so that's good. I just want to make sure its there when we get there, ya know? Thanks for the info.
To add to Quill's good advice, if a company is laying off its employees, then it would seem important to move your account by a tax-free rollover asap. There is one exception: If your SIMPLE IRA was established within the past two years then it cannot be rolled over tax-free except to another SIMPLE IRA. After the expiration of the 2-year period, an amount in a SIMPLE IRA may be transferred in a tax-free trustee-to-trustee transfer to an IRA that is not a SIMPLE IRA -- just like any other IRA. See this page on the IRS site: http://www.irs.gov/retirement/article/0 … 20,00.html
I will check up on that link. Thank you!! I honestly have no idea how it all works. His previous employer set it all up and we just kinda forgot about it, until one day I got a statement in the mail and was like...holy crap!!! Where did this come from, and what am I supposed to do with it now?
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