State retirement funds

[KARI]

Good afternoon, my question is regarding my husband's retirement funds.

Nine years ago my husband left his profession as a police officer. At the time we moved to a different state but left his retirement plan intact with the state of Wisconsin.

Due to the state of the economy we are wondering if it would be wise to take these funds and invest them elsewhere. Would someone please explain the penalties in doing so, beyond the 10% or is dependant upon the state in which the funds are located?

Also, is it possible to do a direct rollover into another type of an account?

Which is the best option? My husband feels it's important to diversify and believes that precious metals are vital to one's portfolio at this time.

Thank you!
Kari

[disneysteve]

I may be mistaken but I don't believe pension plan funds are able to be rolled over in the same way that 401k or 403b plans can.

Assuming you could move the money (which I don't think you can), why would you want to.

And no, I wouldn't be putting any significant amount into precious metals - maybe 5-10% of your portfolio tops.

[bennkar]

Usually there is an option to cash out a pension, though rarely is it worth it. Just ask the plan administrator about the rules for this, and as well if they know if you can roll the cash out over to an IRA. That said, unless you know he is going to die before he gets his benefits, I wouldn't even consider this option.

[doxie]

If you are talking about a 401k/403b type account that is a supplement to the pension (ie the federal government's TSP plan), then you should be able to roll it over into another retirement account without penalty. If you are talking about cashing out the pension, I wouldn't touch it.

[GREENBACK]

Presumably, the OP is referencing a pension fund and not a public employee's fund (457).If it's a pension I don't think it's portable at all. If it's a 457 it should be eligible to roll over. As stated, the plan administrator could help greatly here.

[jpg7n16]

Good afternoon, my question is regarding my husband's retirement funds.

Nine years ago my husband left his profession as a police officer. At the time we moved to a different state but left his retirement plan intact with the state of Wisconsin.

Due to the state of the economy we are wondering if it would be wise to take these funds and invest them elsewhere. Would someone please explain the penalties in doing so, beyond the 10% or is dependant upon the state in which the funds are located?

Also, is it possible to do a direct rollover into another type of an account?

From publication 575 - Pensions and Annuities (Publication 575 (2010), Pension and Annuity Income )it seems that you may actually be able to roll the pension directly into a personal IRA. But I don't have any experience in this area, so I'm reluctant to say one way or the other.

Like others have said, call the administration in the home state and ask them what your options are

Which is the best option? My husband feels it's important to diversify and believes that precious metals are vital to one's portfolio at this time.

Thank you!
Kari

Those two parts of that statement are highly contradictory.

Precious metals should at MOST be under 5% of your total portfolio.

So for him to say he wants a diversified portfolio, and the main determining factor is something that should be less than 5% doesn't make much sense.

The stock/bond allocation is the main vital determinant. Precious metals are essentially immaterial.

[tripods68]

Pension plans usually allow a full distribution or what's called "REFUND" or "CASH OUT" feature in most pension plan. We have this on my existing pension plan. You should call them to find out.

[Angio333]

Was he fully vested? If so, does that allow him to get medical benefits at a certain age?

[97guns]

if you can cash out of the pension somehow then it would be in my opinion to definately do it, all states and cities are on the brink of bankruptcy and the pensions will be the first to get hit. i would take the money and buy at least a years worth of food and put the rest into precious metals, again of my opinion.

these observations are not opinion but are fact:

food will go higher due to gas prices alone not to mention these catalysts
egypt is not helping
weather is changing leading to unstable crops ?
animals are dying leading to shortages ?
our economy sucks, FED is pumping dollars causing devaluation and leading to food inflation !!

[Angio333]

if you can cash out of the pension somehow then it would be in my opinion to definately do it, all states and cities are on the brink of bankruptcy and the pensions will be the first to get hit. i would take the money and buy at least a years worth of food and put the rest into precious metals, again of my opinion.

these observations are not opinion but are fact:

food will go higher due to gas prices alone not to mention these catalysts
egypt is not helping
weather is changing leading to unstable crops ?
animals are dying leading to shortages ?
our economy sucks, FED is pumping dollars causing devaluation and leading to food inflation !!

I agree with just about everything you said except puting just about all of the pension in precius metals. Aren't you afraid that the precious metals are in a bubble, which will pop soon?

[jpg7n16]

if you can cash out of the pension somehow then it would be in my opinion to definately do it, all states and cities are on the brink of bankruptcy and the pensions will be the first to get hit. i would take the money and buy at least a years worth of food and put the rest into precious metals, again of my opinion.

these observations are not opinion but are fact:

food will go higher due to gas prices alone not to mention these catalysts
egypt is not helping
weather is changing leading to unstable crops ?
animals are dying leading to shortages ?
our economy sucks, FED is pumping dollars causing devaluation and leading to food inflation !!

This post reminds me of those people back in the day that were saying the government would fail and the Dow would fall to 1000.

If I told you prices of chicken haven't risen much in 10 years, and prices of beef are at an all time high and costs 3x more today than it did 10 years ago, which makes more financial sense to buy: chicken of beef?

But if you tell these people that the S&P 500 hasn't risen much in 10 years, and prices of gold are at an all time high and costs 3x more today that it did 10 years ago, they'd keep saying 'buy more gold.'


So in the supermarket if you're looking to buy something, you want the prices to keep going down. You only want high prices if you're looking to sell.

The same logic should hold for investments. If you're looking to buy (purchase/invest) then you want the prices of stocks to keep going down. You only want high prices when you're looking to sell. FYI - the prices of gold are higher than they've ever been.

The dumbest reason in the world to buy a stock is because it's going up.
-Warren Buffett

[97guns]

...and the DOW is not at an all time high? all your holding is a piece of paper that says you own XX shares of XYZ company. i hold my investment, nobody can take it from me. gold is going up because the dollar is getting hammered. the sheep will be slaughtered. open your eyes and see whats going on in the world right now.

a Q for the OP, why does your husband want to take a position in precious metals?

[jpg7n16]

...and the DOW is not at an all time high?

Nope. Not even close. Dow is about 15% under it's all time high dollar figure. Dow Jones Industrial Average: INDEXDJX:.DJI quotes & news - Google Finance

But it is at a cheap valuation at only 12.5 times earnings. (average is around 16, high was around 45) That's 67% off the highest valuation from earnings.

See valuation multiples at: SPDR Dow Jones Industrial Average Report | DIA | Portfolio

all your holding is a piece of paper that says you own XX shares of XYZ company.

You say that like it's nothing. 'Well all you're holding is a piece of paper that says you own this house.' 'All you're holding is a piece of paper that says we're married.' etc.

Legal ownership of a part of a company is kind of a big deal.

In fact, most gold investors don't typically invest in gold. All they own is a piece of paper that says they own some gold.

i hold my investment, nobody can take it from me. gold is going up because the dollar is getting hammered. the sheep will be slaughtered. open your eyes and see whats going on in the world right now.

Most people who are stuck in believing the bubble think the rest of us are idiots. Take your own advice. An asset you bought years ago as an investment is selling for more than it ever has. Now would be an intelligent time to sell that asset.

Buy low, sell high = profit
Buy high, hope for higher = gambling/speculation

[GREENBACK]

if you can cash out of the pension somehow then it would be in my opinion to definately do it, all states and cities are on the brink of bankruptcy and the pensions will be the first to get hit. i would take the money and buy at least a years worth of food and put the rest into precious metals, again of my opinion.

these observations are not opinion but are fact:

food will go higher due to gas prices alone not to mention these catalysts
egypt is not helping
weather is changing leading to unstable crops ?
animals are dying leading to shortages ?
our economy sucks, FED is pumping dollars causing devaluation and leading to food inflation !!

Sounds like armageddon is right around the corner huh?

[baptiste.tyrell]

I wouldn’t panic reading @greenback’s post above if I were you