401a - Hold, Refund, or Move?

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401a - Hold, Refund, or Move?

Post by vss317 » Tue May 14, 2019 1:41 pm

I've asked this before, but dove into a little more detail about the 401a (previously I thought it was a 403b, but I was wrong). My main question is should I hold it, refund it, or move it? My thoughts were moving to my Roth IRA because I don't think the estimated monthly pension is all that great. Either way, here's what I found and looking for opinions.

401a (approx $36,000)
No contributions, holding from a previous job
My Estimated Monthly Benefit at Retirement: $347

Withdrawing would waive rights to the following:
•Long Term Disability: If you are currently receiving monthly benefits under the ASRS Long-Term Disability Income plan and choose to withdraw your funds from the ASRS, you will no longer be eligible for monthly disability payments.

•Survivor Benefits: If you have funds on account with the ASRS and die prior to retirement, a survivor benefit will be paid to your beneficiary. Survivor benefits are also available after retirement. Click the Survivor Benefit link for more information.

•Monthly Pension: Once you reach early or normal retirement you will be eligible for a monthly pension benefit, payable for the remainder of your lifetime. Click the Retirement link under the Benefit Estimates section for more information.

•Retiree Health Insurance: If you retire from the ASRS, you will be eligible to participate in a group health insurance program that offers health, dental, and vision coverage for retirees.

•Premium Benefit program: If you retire with 5 or more years of service and have health insurance with the ASRS or an ASRS employer, you will be eligible for a monthly premium benefit that will offset the cost of health insurance premiums.

•Permanent Benefit Increases: If you retire from the ASRS, you may be eligible to receive increases to your monthly pension when excess investment earnings meet certain criteria.

That's about everything. My information is below. I didn't include my wife's information because she's all set and pretty solid with her retirement stuff.

Thank you.

Emergency funds: 3 months and still adding, goal is 6 months (checking account)
Debt: Mortgage $198,000 at 4.85%, Car $9,400 at 2.25%
Tax Filing Status: Married filing jointly (approx yearly gross income $125,000)
Tax Rate: 22% Federal, 4.24% State
State of Residence: AZ
Age: Him 35, Her 34
Desired Asset allocation: 80% stocks / 20% bonds
Desired International allocation: 20% of stocks

His 401k (approx $29,000) - 5% contribution, 2.5% company match
100% American Funds 2050 Target Date-R4, RDITX (0.77)

His Roth IRA at Vanguard (approx $6,900) - being used as retirement, but potentially paying for education for kiddos
$50 every two weeks - Total Stock Market Index Fund Admiral, VTSAX (0.04), Total International Stock Index Fund Admiral, VTIX (0.11)
This will go up once emergency fund is at a comfortable amount.

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Joined: Sat Jun 24, 2017 6:37 pm

Re: 401a - Hold, Refund, or Move?

Post by DP737 » Wed May 15, 2019 11:25 am

I’d move it, given ASRS’s portfolio (about 60% equities) and simplifying financial holdings. Adjust your withholding to account for the 36k increase in income from the conversion and you’ll be set.

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