| Two accounts from two former employers, what to do? |
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impala_ws6
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| Two accounts from two former employers, what to do? |
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Well when it comes to investments, especially retirement, I am just a newb. I will be turning 30 and I am currently a city worker with a pension and a 457 "deffered comp" account with Nationwide. Being young naive I didn't give much thought to retirement so I never kept up with my accounts from my former employers. I recently discovered I have an account with Vanguard Prime money market fund rollover IRA at around 1k. The other account is with TIAA-CREF, it says its a "defined contribution retirement plan" with almost 9k on it.
My questions is what do I do with it? Do I just leave them there till I retire? Could I possibly take the money from Vanguard and put it into my 457?
Could I invest the 9k into another type of account? Thank you for any info and your patience lol.
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Tue Feb 10, 2015 5:34 am |
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oldguy
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At age 30, I would (and did) invest entirely in equities - no money market, no CDs. I would invest in an SP500 Index Fund, the longterm historic return is 11%/yr. Vanguard has a good one - maybe you can move the $9k to your Vanguard IRA and invest the $10k in the SP500?
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Tue Feb 10, 2015 1:27 pm |
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GardenCat
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Hi there,
You need to find out what "type" of accounts you have.
Which acct is the one that is yours with your current employer? If this acct is pre-tax and has a match from your employer for your contributions, you should put whatever it takes into this acct every pay period to get the full match - the match is an instant 100% return on your contribution! Talk with your HR person about your options for how this $ is invested.
The TIAA acct may be an annuity, similar to my wife's TIAA acct, from her work at a public institution. Where did/does this acct come from, is it active (are you still contributing to it), can it be converted? These are ?s for either your HR dept. or for TIAA directly if this acct is not still actively being contributed to.
You may not want to put your 457 $ into your Vanguard acct unless the 457 acct is now inactive and can be directly rolled over (you do not get the money, even for a short period of time). A 457 is a deferred income acct and can be rolled over into an IRA, an existing one or a new one. People at Vanguard can help you with this.
The Vanguard Prime MM acct is earning maybe 0.02% interest per year. You can move this money into Vanguards SP500 fund for no cost. You can do this online. If you are not set up to do this already, anyone at Vanguard can help. They are paid employees and are not paid based on what investments you make. They are very helpful.
What is your "pension"? If this is the one you have with your current employment, how is it invested, what are your options, is there a match? Again, talk with your HR person.
Good luck, you have lots of time to watch your money grow significantly, just keep it as simple as you can and make your contributions automatic.
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Tue Feb 10, 2015 5:27 pm |
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impala_ws6
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Ok so my current employer which is municipal has me under two accounts.
ACTIVE ACCOUNTS:
Pension: 9% each check. I can't put money from other accounts so pretty much I cant touch it until I hit 55
Nation Wide 457 Deffered Compensation Account. I can contribute as much as I want and the account is mean to compound.
INACTIVE Accounts:
TIAA-CREFF Group Annuities 401k Balance 9k, Former employer Private Univeristy
VANGUARD Prime Money Market Acct. IRA Balance around 1k Former employer private corporation.
My two inactive accounts my employers were matching but since I no longer work for them neither of us contribute to them. Nationwide will allow me to rollover my accounts to my 457. I was curious if I could transfer my Vanguard to my 457 and take out money for TIAA to put down on a down payment for a home/apartment building which I would rent out.
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Wed Feb 11, 2015 6:56 am |
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GardenCat
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Good for you! The choices are really up to you!
What I would do BUT remember, this is ME:
1. Keep the Vanguard ACCOUNT, move the $ into a different FUND, like one that tracks the S&P500. In general, it is good to have an IRA account.
2. Talk with someone from TIAA-CREF about what your options are. This being an annuity may limit what you can do, but if it's allowable because of the 401K status, you may be able to Direct Transfer the $ into your Vanguard IRA, where you will have more control over what YOU want to do with the $.
If you can do this, and proceed, be sure you do a DIRECT TRANSFER from TIAA to Vanguard and do not take possession of the $ in-between.
3. As far as taking TIAA $ for use now, again you should talk with folks from TIAA. With the 401K status there may be taxes and penalties for early withdrawl. Maybe if this is a first-time home purchase it would be allowable w/o penalties, but likely only if you were going to live in the house... The annuity status may have different restrictions...
We own rentals and like it for cash flow, but for you, at your younger age, the best use may be just to keep this $ in an IRA and let it grow for the next 30 years and help make you have a good retirement...
Make and keep it simple for now. Contribute to your deferred compensation plans from work, be sure to get the salary match in your pension.
Learn more about investing through good books (such as those by John Bogle, founder of Vanguard) (and "You Can Retire Sooner Than You Think" by Wes Moss). In the investing world, slow and steady really can win the race...
You really do have time on your side, and remember to stick to doing things that YOU are comfortable with.[/u]
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Wed Feb 11, 2015 5:29 pm |
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Wino
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quote:
Originally posted by GardenCat
1. Keep the Vanguard ACCOUNT, move the $ into a different FUND, like one that tracks the S&P500. In general, it is good to have an IRA account.
2. Talk with someone from TIAA-CREF about what your options are. This being an annuity may limit what you can do, but if it's allowable because of the 401K status, you may be able to Direct Transfer the $ into your Vanguard IRA, where you will have more control over what YOU want to do with the $.
If you can do this, and proceed, be sure you do a DIRECT TRANSFER from TIAA to Vanguard and do not take possession of the $ in-between.
If the Vanguard has only $1K, the options are severely limited. Basically, you are stuck with a "target retirement fund," which has slightly higher fees. Three thousand is about the minimum to get any significant fund options. Ten thousand is the threshhold for lower fees. Twenty-five thousand is the level where just about everything they offer is available for your choosing.
If you can, you should move the TIAA to Vanguard to take advantage of the many options they have. You will do this by instructing Vanguard to initiate the transfer and give them the TIAA account information. It may take up to three or four weeks for this process to complete.
quote:
Originally posted by GardenCat
3. As far as taking TIAA $ for use now, again you should talk with folks from TIAA. With the 401K status there may be taxes and penalties for early withdrawl. Maybe if this is a first-time home purchase it would be allowable w/o penalties, but likely only if you were going to live in the house... The annuity status may have different restrictions...
Don't withdraw or spend any of this money. You need a back up emergency fund in case of severe emergencies. Retirement accounts are fall-back contingency funds for sick kids, dying relatives, and other REAL emergencies. Having a car repossessed is nothing compared to a child who has cancer and needs to fly to Minnesota or Houston or Switzerland for treatment.
Never touch retirement funds except for retirement and real emergencies.
quote:
Originally posted by GardenCat
...at your younger age, the best use may be just to keep this $ in an IRA and let it grow for the next 30 years and help make you have a good retirement.
This
quote:
Originally posted by GardenCat
Make and keep it simple for now. Contribute to your deferred compensation plans from work, be sure to get the salary match in your pension.
Ask questions until YOU understand what is happening. If you aren't sure why you're doing something, don't do it. Bogle is good beginner advice, but just like Dave Ramsey, you have to tailor what he says for your own circumstances, comfort levels, and goals. Even in a slow but steady race, people sometimes accelerate to pass the one in front, and everyone races the last 20 meters to the finish line.
I prefer the Hitchhiker's Guide plan for investing: "Don't Panic!"
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Thu Feb 12, 2015 12:53 am |
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GardenCat
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I agree with Wino's input on my input.
Do what YOU understand and are comfortable...
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Thu Feb 12, 2015 7:54 pm |
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