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jkoehn

Advice On Teacher's Retirement

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I checked on my wife's deferred comp plan offered through her employer (San Jose Unified). It is administered through Tax Deferred Services, Inc. (TDS) and she can invest in either annuities (variable, indexed, fixed) or mutual funds through a 403b or 457 plan. My preference would be to invest through the 457 plan in mutual funds rather than annuities. However, I have subsequently learned that in order to invest in mutual funds, they must be through risk adverse managed (RAM) accounts. The RAM account fee structure is 100 basis points and $36 annually. To avoid these fees, I am thinking she should open a Roth IRA with someone like Vanguard and completely avoid her employer's deferred comp plans.

 

One last wrinkle is that she has small balances in CalPERS and the Savings Plus Program for Part-time, Seasonal, & Temp Employees (a 457 plan) that we would like to consolidate somewhere. I don't think she can roll these over to a Roth IRA but I think she could at least rollover the Saving Plus Program balance into the new 457 plan. I don't know what to do with the CalPERS balance.

 

Any thoughts on Roth IRA vs. deferred comp through employer? Also, any thoughts on what to do with the balances in CalPERS and Savings Plus Program?

 

FYI, we are both 29 and I am maxing out my 401k with my employer. Thanks in advance.

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Hi,

 

About what to do with CalPERS account here is my suggest to you. Is she working for the school district? if so, she should be an active member of CalPERS if not, let the school district know she is a member. If she is a teachershe can make a choice to stay in CalPERS plan or move to STRS plan. There are some benefits by her staying a CalPERS member over becoming a STRS member. Look into both options before rolling money out of CalPERS. Please post back informantion, I will check later to see if you have done so.

 

vyork

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Thank you for the reply. Yes, she is working for the school district as a teacher. She is a member of CalSTRS and is making contributions on a monthly basis. I was under the assumption that she had no choice in joining STRS. I had no idea that she had the choice to stay in PERS or switch to STRS. Sounds like this should have been explained to her when she started working in the district.

 

When she ended her employment with the PERS employer, she was sent a packet of information from PERS asking what she would like to do with regards to the disposition of her retirement contributions. We read over the packet but never did anything because we didn't know what would be the best course of action.

 

So, to sum up, she is a member of both CalPERS and CalSTRS with less than 5 years of service credit in both. What would you suggest she do with the funds in PERS? Thank you.

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Good Morning,

 

I am sorry to hear that no one told your wife about her right to stay a CalPERS member, that is generally the case in these matters. You still have a options to fix this damage to your wife's future retirement. I am impressed that someone at your life cycle is thinking about retirement issues. So I want you to give me a call at my work or home. I generally do not give out my telephone numbers, but I feel strongly feel about your case, so here they are (530) 365-1801 ex: 237 or (530) 246-2304. I will need to talk to you on the phone to tell you in detail all of your choices in this matter. I am looking foreword to hear from you.

 

vyork

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