Cash in small retirement, to do or not to do?

[Mrs. Charming]

It's not as serious as it sounds, I only had the job for 9 months before I got sick with DD's pregnancy and had to quit. I had forgotten about it until I got a newsletter in the mail-- nothing even account specific. The account is probably about $1000 or even less, so it's not a big chunk of change, and it's not like we'd be relying on it to live when we're old. We could use a new couch, lol, or just a little extra Disney play money.

Do I bother cashing it in, or just let it be?

 

[abmitch01]

I am a big one for saying never touch your retirement. That could grow into a nice chunk of change in 40 yrs. Try plugging it into a retirement calculator.

 

[abmitch01]

even if you think of it as "play money", you could stick it in a stock index fund like Vanguard 500 (low fees) and just let it ride. Won't you be penalized if you take it out now?

 

[Marionnette]

The tax consequences would be hefty. I say roll it into an IRA. You would be surprised how compound interest works to your advantage.

 

[Mrs. Charming]

I am a big one for saying never touch your retirement. That could grow into a nice chunk of change in 40 yrs. Try plugging it into a retirement calculator.

I just did... doesn't look hopeful since I'm a SAHM and not contributing to it. Thankfully DH has the nice retirement plan, this is just a little extra something I earned back in '06.

 

[Mrs. Charming]

even if you think of it as "play money", you could stick it in a stock index fund like Vanguard 500 (low fees) and just let it ride. Won't you be penalized if you take it out now?

I just figured I'd cut my losses as far as the penalties. I know it's not the most prudent move, but I was like... ehh.. I forgot about it this far!

I'll look into the Vanguard 500 though, can't hurt, right? *edited: looked into it, I don't have enough in the measly retirement to meet the 3K minimum.

 

[wdwfan16]

It's not as serious as it sounds, I only had the job for 9 months before I got sick with DD's pregnancy and had to quit. I had forgotten about it until I got a newsletter in the mail-- nothing even account specific. The account is probably about $1000 or even less, so it's not a big chunk of change, and it's not like we'd be relying on it to live when we're old. We could use a new couch, lol, or just a little extra Disney play money.

Do I bother cashing it in, or just let it be?

Roll it over to your current IRA account. Do not cash it in.

 

[abmitch01]

I just plugged it into a interest compounding calculator for the heck of it and at 8% earnings yearly you'd have 21,000 in 40 yrs

 

[ccgirl]

I say start your own retirement. I had a friend that relied on her DH while they were married for their retirement. THen....they got divorced and she was out the retirement. Not saying that will happen. Just saying you should have your own nest egg as well.

 

[Mrs. Charming]

Roll it over to your current IRA account. Do not cash it in.

I don't have one now, but I suppose I could set one up. I've never had an IRA before, how much of a minimum deposit do they usually require?

I just plugged it into a interest compounding calculator for the heck of it and at 8% earnings yearly you'd have 21,000 in 40 yrs

That's not too shabby. I have no idea what kind of interest it's accruing now. Now would that interfere with any kind of financial aid that we might need for DD's and DS's college?

I say start your own retirement. I had a friend that relied on her DH while they were married for their retirement. THen....they got divorced and she was out the retirement. Not saying that will happen. Just saying you should have your own nest egg as well.

I've thought about that too. I can say that it's a fantasy world and we'll never ever get divorced until I'm blue in the face, but it doesn't necessarily make that true. Life throws curveballs!


*******
I guesss my decision is made. I'm not going to touch it, or I'll roll it into an IRA. I don't *need* to cash it in right now, like I said it would just be play money. If this were a crisis situation, sure, that would be different. But thankfully it's not!

 

[Ava]

I don't have one now, but I suppose I could set one up. I've never had an IRA before, how much of a minimum deposit do they usually require?

It probably depends on the bank, but my partner opened an IRA at our bank with under $1000.

 

[abmitch01]

I think currently retirement savings is not looked at when it comes to financial aid on that federal form

 

[tlcoke]

If you withdraw the money expect to be hit with about 40% in taxes/penalties off the top before you get the cash.

Roll it to an directly into an IRA - don't leave it with your previous employer's plan.

 

[Bakerteam]

Roll it over...not worth paying the penalities...

 

[abmitch01]

my DD (11) is watching Say Yes to the Dress, her fav show. I just had a convo about saving money because of this thread. When one bride was about to spend $11,000 on her dress, I said, "what if she spent $1,000 instead and saved the rest? what would she have in retirement?" Claire said, "she'd have maybe 12,000". She about fell off her chair when I said she could have $220k.

she still thought the bride should buy the expensive dress, arghhh!

 

[stichy]

I wouldn't because you will have to pay a 10% penalty along with taxes on it at your current tax bracket. That's not going to leave much left over.