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Old 02-11-2021, 02:03 PM
  #1

I have Rlyndeckerís benefits from CalStrs. I need to either open an IRA or CalStrs Pension 2 plan. My momís financial advisor knows nothing about the CalStrs plan so says to do an IRA. Anyone know why I should choose one over the other?


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Old 02-11-2021, 02:10 PM
This message has been deleted by amiga13. Reason: I didnít understand the question, sorry.

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Old 02-11-2021, 02:58 PM
  #2

Here is a question while you are investigating so you can avoid any negative tax implications.

Should it be a rollover IRA where the funds go directly to another IRA and not to you personally to invest in an IRA? Are rules different for an inherited IRA?
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Old 02-11-2021, 03:10 PM
  #3

I know nothing about California pension plans but I would absolutely get a financial advisor who is well versed in both options and your personal finances to give you advice.
Just saying to do an IRA bc they know nothing about the pension plan doesnít seem like sound advice to me.



My financial advisor always recommends a 403b plan over a Roth IRA, a Roth IRA and an IRA are not the same either though.
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Old 02-11-2021, 03:29 PM
  #4

The advisor said an IRA because it awards fees to the company that opens it up. I remember this question was posed at a preretirement meeting. Most teachers that I talked to stuck with the CAL STRS Pension plan and its lower fees.
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Old 02-11-2021, 05:43 PM
  #5

I know little, even though I am a CAlstrs member. If I were you, I would call CAlstrs and ask them about pros and cons. Keep in mind, they will want you to keep the money in their system. Then maybe call a bank and ask them.

As I understand it, you inherited her pension. Is it worth it, and is it even possible, to take a lump sum and invest it in an entirely different kind of program? Can you roll it over into a Roth IRA for Gabrielís education?

This is one of those instances it might be best to hire a financial advisor.


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Old 02-11-2021, 05:53 PM
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Just be careful with the financial advisor because many of them are looking to invest your money and collect fees.
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Financial question
Old 02-11-2021, 07:16 PM
  #7

I would stick with a CalSTRS pension plan. That is guaranteed income, thus security, for the rest of your life. An IRA guarantees nothing, can fluctuate up or down, and it may be subject to maintenance fees.

Last edited by Ruby tunes; 02-11-2021 at 09:58 PM.. Reason: Spelling error
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Old 02-11-2021, 07:16 PM
  #8

Did Rlyndecker belong to the union? If she did, call them. The state organization of my union contracts with an advisory firm to help with issues such as this. The CA state union might have a service like this too. At a minimum, the state union, if they have this service, should give you the contact info.
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Hold on
Old 02-11-2021, 08:37 PM
  #9

What she is asking about is an investment account. It is not the same as a teacher pension. There is no guaranteed income.

I would find a financial planner in CA that works for a consulting fee - not a commission. You need to find out about what fees are charged for each type of account. The planner should be able to send you a prospectus for both scenarios so you can make an informed decision.

There are timelines involved to avoid having taxes taking out. Also disbursement rules. You really need an expert. I would start with CTA. They have lawyers who can tell you what steps to take first.
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Taxes
Old 02-12-2021, 09:57 PM
  #10

I am trying to avoid taxes so taking it as a lump sum wonít be optimal. I am looking at selling my Condo and I have a lot of equity in it, if it stays under the $300k mark (it will be iffy), I will be okay, but right now I am looking at a lot more based on what others have sold for. So I will be paying capital gains taxes on that. Unless I rent it out, which I am iffy on.

I know he gets a commission, my mom and her friend both love the guy, but I am leary of anyone making a commission.


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Old 02-13-2021, 08:17 AM
  #11

That's exactly the scenario that came up in several pretirement meetings . There are many articles written about the unfair and high fees with some companies.
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