I am just full of questions this morning. Ok so DH and I both worked for the state for a while it is unlikely that we will go back to work in that system. Both of us get annual pension statements. Telling us how many credits we need to retire and giving us our account balence. Neither of us worked for more then 2 years so the balence is low. We can't take it out without penalties but we car roll it into an IRA.
So should we?
If we do how and where do you open an IRA? We have never looked into them mainly because we haven't maxed out DH's 401K yet.

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Kimberly Proud Mommy to Bethany Rose April 2006

If the money is available to you already, definitely roll it over. Even if it isn't a big amount using it to start an IRA is better than paying 20% tax plus whatever penalty may be incurred (possibly 10%) at the end of the year. There are many options for IRAs out there. Some names I am familiar with are Raymond James, Edward Jones, ING. Also many banks do them. You should find one you trust and talk to them about what you would like to have at retirement and they can help set you up on the right path.

Another option for your husband may be to roll it into his 401(k) account (if you guys are happy with it's performance). He'd probably need to talk to his current employer and the former employer to see if that is an option.

I work with my company's pension and 401(k) accounts and so often I see people cash it out when they terminate and they lose a fifth of the money that is there. They don't seem to think that 2 or 3 thousand is worth saving until they are ready to retire.

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What would happen if you just leave it?

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Make someone's heart smile today.

Never say never.........here's the reason why. My DH works for the state of IL. Fortunately, he's still there and has 2.5 yrs left to get his 20 yrs in and can "retire" but not draw on it for another 10 yrs after that. I have a girlfriend that worked for the state. She quit her to job be a SAHM. She had worked there for a few years and had a little bit of a pension. She opted to take it and roll it over. Well, she had to go back to work a few years later, and since she took her pension, she WOULD NOT get her seniority back and be "reinstated" as a state employee. So, she had to start all over as a "newbie" and didn't get "pre state employement" preferential treatment like she would have if she wouldn't have touched the pension. So, even though you say you would NEVER go back to the state, I would hate to see you elminate a "one up" advantage if you were to pull it out. I don't know what state you are talking about, but that's the way it works with IL. JMO though.........