I got a good question from a reader and wanted to share it with you. Here it is; I’d be interested to hear your thoughts on how he might best handle this and then I’ll weigh in with my thoughts after hearing from some of you finance buffs. While things like pension rules, a 401k loan and IRA contribution limits may be important, would love to year your thoughts:
I’ve been reading your blog now for a few months. My employer has decided to freeze and subsequently close out our the fixed pension plan. They stopped offering it as a benefit to new employees 5 years ago or so, but now they are a stopping the plan and disbusing each employees/retirees share.
I’ve been with the company about 8 years, and have had 5% put towards my pension each year. I don’t know officially yet, but it looks like there may be three different options. 1. cut a check 2. Retirement Rollover (401K/open a Roth IRA) 3. Annuity
At first glance I was thinking certainly a retirement rollover would be the way to go. However, when I started to think about it. I could take that cash, and pay down some debt, depending on how much I was left with after the government coffers got their unfair share. 🙂 Student loans, car, house,all those need to be paid off.
Anyway, just wondered what your thoughts were and thought this might make an interesting blog post.