Calling Retirement Account Experts

[Captain Morgan]

Listen to shmike. And as far as setting up an IRA, it can be done in 15 to 20 minutes online, with various different brokerage firms. Check around and see which ones have "no fee" accounts, and no minimum balance requirements. I know for sure that Schwab is that way, but don't know about any other firms.

[Amber Lamps]

Originally Posted by Captain Morgan

Listen to shmike. And as far as setting up an IRA, it can be done in 15 to 20 minutes online, with various different brokerage firms. Check around and see which ones have "no fee" accounts, and no minimum balance requirements. I know for sure that Schwab is that way, but don't know about any other firms.

I agree but only with the larger account. You mentioned "debt", if it is high interest then I would cash out the small account and pay it off. Even if the hit were 30 points, it's nothing compared to credit card interest over the long term. You're still young and I would focus on getting debt free before I would be concerned with a retirement account considering the crappy interest that's being paid (cd and guaranteed interest accounts) versus the high interest that is being paid out (credit cards). Also, if your employer was "matching" your investment... you're really not "losing" anything with the penalty.... just sayin'...

[Gas Man]

But if you try to skimp off on the taxes Capt will come after you! Remember this!

[buzzcutt2]

Originally Posted by shmike

The 30% penalty is BOGUS. There is no such thing.

If you cash the account in, they will automatically withhold 20%. Because you are under age 59.5, there will be a 10% early withdrawal penalty. If you don't make much money, your tax liability will be significantly less than 20%.

In this case 20 + (ten)10 DOES NOT equal 30. Whatever you over paid in withholding, you'll get back next year when you file your taxes.

If the money is pre-tax (most likely) then your only option (to keep to tax deferral going) is to roll it into a traditional IRA or your current employer's plan.

Don't get confused by the "types" of IRA's. There are only 2: Traditional and Roth. Traditional keeps your money as it is (pre-tax). A Roth may have its advantages but that is a whole seperate discussion.

Thanks for the info...I'm sorta in the same boat and was wondering what I should do.

[shmike]

Originally Posted by buzzcutt2

Thanks for the info...I'm sorta in the same boat and was wondering what I should do.

Cash it in and buy some ATV-ing land.