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kat92128

My 59 1/2 Birthday! (How I Celebrated And A Question.)

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It's MINE! All MINE! Maybe reaching age 59 1/2 doesn't mean much to most people, but it does to me! As of Tuesday, my investments are now my own - if I need them.

 

The first thing I did was call Vanguard and had them roll my dormant 403b into my personal IRA. This was accomplished quickly over the phone. Now I can add to it, rebalance it, even withdraw from it if necessary. And I have also reduced the fees. (This "dormancy" occured a few years ago when investing with Vanguard directly was no longer an option under my district's 403b plan.)

 

The second thing I did was send TIAA-Cref a message: Can I roll over my current and active 403b into my personal IRA with no penalties? I don't know the answer to that, but maybe one of you do. The Vanguard rep said it would depend on whether the plan was "erisa" or "non-erisa."

 

The third thing I did was arm-twist my 27-year-old daughter into contributing to her 401K. I am so glad I saved the money I did, I just wish I began at her age.

 

Did any of you celebrate 59 1/2?

 

kat

 

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kat92128,

 

Congratulations on reaching 59-1/2-years old. I know it is very liberating to reach this milestone age with regards to retirement plans.

 

I celebrated my 59-1/2 last October and in April I celebrated my 6oth.

 

Like you, I have TIAA-CREF as my company’s primary 403 (b) defined contribution plan, which they deposit contributions into CREF. And my personally funded, by pre-tax pay roll deductions into my CREF supplemental retirement annuity (SRA).

 

Within the next couple of years I plan to roll over all my CREF accounts (Note: I do not have any monies in the company contributions or mine in TIAA) into an outside-managed IRA.

 

TIAA-CREF depends heavily upon using its web site for their participants to obtain information. I do not see any information or forms that detail how to do a roll over or do a “Trustee to Trustee” direct transfer to an outside IRA away from TIAA-CREF.

 

Has TIAA-CREF responded to your question or message you noted in your post about rolling over your funds into your Vanguard IRA?

 

Thanks,

 

Alcoc628

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Hi Kat,

 

Congrats. I called Vanguard and they did all the work when I rolled over my 403b years ago from Tiaa Cref.

 

Good luck and thx for posting this milestone. It IS important in the retirement savings plan world.

Steve

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Joel,

 

Thanks for your question.

 

I want to move out of CREF to exercise the opportunity to invest in a wider spectrum of investments available on the open market. Staying with CREF limits my investment choices to their plans stable of CREF mutual funds or annuities. Currently, I am not a big fan of annuities.

 

Previously, I had an IRA with CREF that I rolled over to the same retirement CFP/“Personal Portfolio Manager” who manages my wife’s former Federal Government “Thrift Saving Plan” (TSP) funds she rolled into an IRA.

 

The IRA’s that are under his management are doing very well and we both are not encumbered by either the CREF or TSP plan rules with our monies in these IRA’s.

 

Alcoc628

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Wow! I thought this thread was dead because nobody responded, but today a flurry of activity. Anyway, I easily rolled over my "dormant" 403b with Vanguard into my regular IRA with Vanguard with just a simple phone call. It was painless.

 

At the same time I emailed TIAA-Cref and asked them about my options for rolling my active 403b into my personal Vanguard IRA. Initially I received wrong information. The respondent stated that I would have to pay taxes. I knew this was not true since this would be a direct rollover from a 403b to a Traditional IRA. She corrected herself when I responded in kind. Fortunately, I already knew the answer, but it bothers me that someone without as much knowledge would have been given incorrect information. I never stated that I would be moving it into a Roth. Bad form, TIAA...

 

Anyway....between my 59 1/2 birthday and now, I have decided to leave education in CA, take my STRS and move to Austin, Texas, where my family lives. I'll be leaving when the school year ends, and I couldn't be more excited. At that time, I will rollover my 403b with TIAA Cref directly into my IRA with Vanguard. Vanguard will handle all of the paperwork, they said, OF COURSE they will! Think of all the new money they will be getting.

 

I'll still have to work at least part-time in Texas, but I'm going to coast for a while. I haven't decided whether I'll go back to education or try something entirely new...I'm leaning towards the latter!

 

 

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kat92128,

 

Congratulations on your decision to leave education and relocate to Austin, Texas.

 

Austin is one of the favored places to retire to for new retirees. And to think that Texas has no state income taxes and does not tax retirement income! However, Texas’ property and sales taxes are high! My wife and I visited Austin and considered it as a relocation site when I retire.

 

Like you, I experienced some miss-information from the TIAA-CREF telephone representatives in 2007, when I was doing a 90-24 transfer from one of the other company sponsored retirement vendors to TIAA-CREF. After much correspondence and filling out multiple CREF forms my 90-24 transfer was successful.

 

However, all the monies went into CREF’s Money Market account and not into the funds I had designated on the CREF transfer allocation forms. Fortunately, I kept an eye on the monies deposited into the money market and selected the equity funds available in our company retirement plan and moved them manually via CREF’s web site.

 

Since you already have an IRA account with Vanguard the process of moving your CREF account balance via a “trustee-to-trustee” transfer should be flawless.

 

Again, in closing, I want to wish you the best in your decision to leave education and to relocate.

 

Alcoc628

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Congratulations. In my opinion you are making smart moves. Next year at this time I will be 59.5 and I too will transfer all my "collection" of funds all to Vanguard although I will keep working. Although I am starting to feel that they want me to retire as I have gotten expensive at the top of the pay scale. :)

 

I want to lower the number of funds I own to the bare minimum. Getting rid of my American funds will help me do that although to be honest even though they underperform index funds just a bit and cost more they have done well too. To me , still, Vanguard is KING because you can't beat their operating philosphy. Long live Vanguard and may more companies adopt their philosohy!!

 

 

Tony

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Generally speaking, it is almost always easier to have the existing custodian change the title on 403, 401, 457 type accounts to an IRA after a triggering event has occurred. The custodian and plan administrator are usually in contact and the imprimatur is easily received. At that point, the monies can be easily moved by contacting the new receiving custodian.

 

alcoc628,

 

To receive the "widest spectrum of investments" an internet brokerage account (ameritrade, Scottrade, etc) will accomplish that goal. An IRA can invest in individual stocks, bonds, etfs, mutual funds, etc and are all available at low costs. The funds can then be slowly moved to a Roth IRA before the RMD at 70 1/2.

 

Bob

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Guest Joel L Frank

Generally speaking, it is almost always easier to have the existing custodian change the title on 403, 401, 457 type accounts to an IRA after a triggering event has occurred. The custodian and plan administrator are usually in contact and the imprimatur is easily received. At that point, the monies can be easily moved by contacting the new receiving custodian.

 

alcoc628,

 

To receive the "widest spectrum of investments" an internet brokerage account (ameritrade, Scottrade, etc) will accomplish that goal. An IRA can invest in individual stocks, bonds, etfs, mutual funds, etc and are all available at low costs. The funds can then be slowly moved to a Roth IRA before the RMD at 70 1/2.

 

Bob

It's best that the tax due on a traditional IRA conversion to a Roth IRA come from sources that have already been taxed, i,e. bank account. Don't do the conversion if you do not have outside sources of money to pay the tax.

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No conversions to Roth for me! I will be living very frugally indeed, and my tax rate will be low! As for the investment part, that will be kept very simple: Index funds and bonds with Vanguard. Quick, easy, good yield and very low expense ratios. Tony, Steve, and Dan....I've learned from the best!

 

Only 7 more work days and counting! I literally drive out of California on June 26. Yee ha!

 

Kathy

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Hey all,

 

I have been watching my bond funds. True they are having a tough time lately with very low yield compared to stocks. However don't forget that bonds are there to cushion your portfolio even as they lose value. Diversification is the key to success. If I were a younger man and a more foolish one I probably would be pulling out of bond funds . I've learned though-don't do it.

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