Retirement Money?

[MsPeliAmour]

Hi everyone. I'm no longer working and, therefore, no longer contributing to my state retirement (teacher) fund. For those of you who had some sort of retirement fund that you were contributing to while you were employed and then stopped working, what did you do with the funds that were invested? Did you withdraw them? I sincerely doubt that I'll reach retirement age and, thus, I'd never see the funds if I leave them where they are. Also, would it affect me being approved for disability? For those not having to deal with this situation, I'd still like to know what you think you'd do.<div><br></div><div> Thanks for any and all advice you all can give me. </div><div><br></div><div><br></div><div>MsPeliAmour</div><div><br></div>

 

[julie]

SSDI is ONLY affected by income earned from WORK. So no, if you withdraw those funds then you will not be penalized as having it as income for SSDI.

As far as the state retirement fund, since it is not federal different penalization rules might or might not apply. I would check with the state and see if you can withdraw without paying a fine due to hardship (that hardship being no longer working and put on disability)

 

[julie]

SSDI is ONLY affected by income earned from WORK. So no, if you withdraw those funds then you will not be penalized as having it as income for SSDI.

As far as the state retirement fund, since it is not federal different penalization rules might or might not apply. I would check with the state and see if you can withdraw without paying a fine due to hardship (that hardship being no longer working and put on disability)

 

[julie]

SSDI is ONLY affected by income earned from WORK. So no, if you withdraw those funds then you will not be penalized as having it as income for SSDI.
<br />
<br />As far as the state retirement fund, since it is not federal different penalization rules might or might not apply. I would check with the state and see if you can withdraw without paying a fine due to hardship (that hardship being no longer working and put on disability)

 

[InhalingHope]

Good question! I also work for a school district and so 7% of my check goes to retirement each paycheck, but I know I will not be able to teach until a normal retirement age especially since this is my second career and so I already started late. I have no words of wisdom, but would love to hear what others say.

 

[InhalingHope]

Good question! I also work for a school district and so 7% of my check goes to retirement each paycheck, but I know I will not be able to teach until a normal retirement age especially since this is my second career and so I already started late. I have no words of wisdom, but would love to hear what others say.

 

[InhalingHope]

Good question! I also work for a school district and so 7% of my check goes to retirement each paycheck, but I know I will not be able to teach until a normal retirement age especially since this is my second career and so I already started late. I have no words of wisdom, but would love to hear what others say.

 

[scanboyd]

I took a medical disability after working 35 yrs. with a hospital, this was 7 yrs. Ago. I left my retirement funds with the investment firm that handles the hospital 403b plan. The management fee is less with them than a individual doing it on his own. I can draw on it when I want. These funds are mine and when I kick the bucket, the remaining monies go go to my family. Theses funds are untaxed, so when I draw them out they are taxed. I assume yours are pre taxed also. Be careful, if you draw them out, (roll) them over into a retirement account. If the check is made out to you yge entire amount will be taxed at one time. Good luck!

 

[scanboyd]

I took a medical disability after working 35 yrs. with a hospital, this was 7 yrs. Ago. I left my retirement funds with the investment firm that handles the hospital 403b plan. The management fee is less with them than a individual doing it on his own. I can draw on it when I want. These funds are mine and when I kick the bucket, the remaining monies go go to my family. Theses funds are untaxed, so when I draw them out they are taxed. I assume yours are pre taxed also. Be careful, if you draw them out, (roll) them over into a retirement account. If the check is made out to you yge entire amount will be taxed at one time. Good luck!

 

[scanboyd]

I took a medical disability after working 35 yrs. with a hospital, this was 7 yrs. Ago. I left my retirement funds with the investment firm that handles the hospital 403b plan. The management fee is less with them than a individual doing it on his own. I can draw on it when I want. These funds are mine and when I kick the bucket, the remaining monies go go to my family. Theses funds are untaxed, so when I draw them out they are taxed. I assume yours are pre taxed also. Be careful, if you draw them out, (roll) them over into a retirement account. If the check is made out to you yge entire amount will be taxed at one time. Good luck!

 

[TleighsHusband]

If you don't need the money or can manage without it, it is usually best to leave money in some type of retirement account. I am sure your state retirement plan has its own unique rules but usually you can roll IRA over from one company to another without any penalty. Almost any time you take retirement out early you will be charged. With Tiffany's from her previous employer, we rolled it over into an account that had no yearly fees and then let it grow (or shrink depending on the market) and then she placed me as the beneficiary.

 

[TleighsHusband]

If you don't need the money or can manage without it, it is usually best to leave money in some type of retirement account. I am sure your state retirement plan has its own unique rules but usually you can roll IRA over from one company to another without any penalty. Almost any time you take retirement out early you will be charged. With Tiffany's from her previous employer, we rolled it over into an account that had no yearly fees and then let it grow (or shrink depending on the market) and then she placed me as the beneficiary.

 

[TleighsHusband]

If you don't need the money or can manage without it, it is usually best to leave money in some type of retirement account. I am sure your state retirement plan has its own unique rules but usually you can roll IRA over from one company to another without any penalty. Almost any time you take retirement out early you will be charged. With Tiffany's from her previous employer, we rolled it over into an account that had no yearly fees and then let it grow (or shrink depending on the market) and then she placed me as the beneficiary.

 

[julie]

If you work you are "supposed to" report it to SSA. however, many people don't. Therefore they generally get the information that you are working when your employer reports it monthly or quarterly in their tax statements.

it certainly wouldn't hurt to notify them you are withdrawing funds from a retirement account, however they count ONLY wages from WORK so if for some reason they were to inquire about it, all you woudl have to do is show them a statement/withdrawal from your retirement account.

 

[julie]

If you work you are "supposed to" report it to SSA. however, many people don't. Therefore they generally get the information that you are working when your employer reports it monthly or quarterly in their tax statements.

it certainly wouldn't hurt to notify them you are withdrawing funds from a retirement account, however they count ONLY wages from WORK so if for some reason they were to inquire about it, all you woudl have to do is show them a statement/withdrawal from your retirement account.

 

[julie]

If you work you are "supposed to" report it to SSA. however, many people don't. Therefore they generally get the information that you are working when your employer reports it monthly or quarterly in their tax statements.
<br />
<br />it certainly wouldn't hurt to notify them you are withdrawing funds from a retirement account, however they count ONLY wages from WORK so if for some reason they were to inquire about it, all you woudl have to do is show them a statement/withdrawal from your retirement account.

 

[fallenarches]

If you do not need the money now, you can either leave it in the account or, if your plan allows, roll it into a personal IRA. If you roll it into an IRA, there are no taxes or penalties paid. If you take a disbursement, you will pay tax on that amount. They will be required to hold back 10% for federal taxes and depending on your tax bracket, you may have to pay more in when you file your taxes. Depending on your overall household income, it MIGHT make sense to roll it into a ROTH IRA. This is something you should really talk to a financial planner about because it could mean saving you thousands of dollars down the road, money you may need to pay for your health care. You should also note that if you are unemployed, you can take money out of your retirement accounts to pay for medical expenses with out having to pay the 10% penalty--you still have to pay taxes though.

 

[fallenarches]

If you do not need the money now, you can either leave it in the account or, if your plan allows, roll it into a personal IRA. If you roll it into an IRA, there are no taxes or penalties paid. If you take a disbursement, you will pay tax on that amount. They will be required to hold back 10% for federal taxes and depending on your tax bracket, you may have to pay more in when you file your taxes. Depending on your overall household income, it MIGHT make sense to roll it into a ROTH IRA. This is something you should really talk to a financial planner about because it could mean saving you thousands of dollars down the road, money you may need to pay for your health care. You should also note that if you are unemployed, you can take money out of your retirement accounts to pay for medical expenses with out having to pay the 10% penalty--you still have to pay taxes though.

 

[fallenarches]

If you do not need the money now, you can either leave it in the account or, if your plan allows, roll it into a personal IRA. If you roll it into an IRA, there are no taxes or penalties paid. If you take a disbursement, you will pay tax on that amount. They will be required to hold back 10% for federal taxes and depending on your tax bracket, you may have to pay more in when you file your taxes. Depending on your overall household income, it MIGHT make sense to roll it into a ROTH IRA. This is something you should really talk to a financial planner about because it could mean saving you thousands of dollars down the road, money you may need to pay for your health care. You should also note that if you are unemployed, you can take money out of your retirement accounts to pay for medical expenses with out having to pay the 10% penalty--you still have to pay taxes though.

 

[kharm]

I, too, was a teacher and am now on SSDI.  I worked for 7 years, and therefore I wasn't "vested" in the pension system in the state I worked in (NJ).  I would have given up a considerable chunk of my money had I simply withdrawn my pension contributions, so I rolled them over into a Prudential IRA (thanks to some help from a financial advisor) along with all the money I had invested in a 403B account while I had been working.  It seems silly to prepare for "retirement" when technically, I am "retired," but for me, it didn't make sense to pay taxes and lose a lot of my money up front by simply withdrawing it.  Fortunately, I am receiving SSDI and disability insurance which together make up 2/3 of my salary and my husband continues to work as a teacher, so I didn't need the money right now.  As for SSDI taking the pension money into consideration, I don't believe it was an issue and it didn't affect my monthly payments issued from SSDI or increase my taxes.  If you can afford to put that money away, I'd roll it over into an IRA or something similar.  If you find you need or want to enjoy that money a few years down the line, at least your money will have grown, and that may help to offset any early withdrawal fees and taxes you may incur at that time.  I hope this helps!