Financial Update and Retirement Accounts…

With the Fed’s interest rate cut and subsequent lowering of rates at ING, I checked my WaMu account and was happy to see that my online savings account is still holding steady with a 5% APY. It currently has a $10k balance.

When I get another job in the next few months, I am toying with the idea of opening and funding a Roth IRA and maybe paying off my lowest student loan with a $5,000 balance. That would leave just $1k left but hopefully my salary will be strong and I should get roughly $2-3k back in a tax return to help beef up my savings. If anything else, I am still thinking that I should at least open the Roth and fund it for the year.

At age 29, I estimate that my pension is worth approximately $15-16k and my 401k has a $27k balance for a total of $43k. I know that it could be better but it’s not bad for my age and my $55k salary. I believe that when I leave, I should be able to take my vested pension with me and roll it over. Here is the language on my employer’s website and below is a chart that I used to estimate the current value:

If you are vested when you retire or leave the Bank’s employment, you can take your benefit with you regardless of your age. You may take a lump-sum distribution (mandatory for benefits valued at $1,000 or less). If your benefit is more than $1,000, you may elect a single lump-sum payment, elect one of the annuity or cash refund payment options, or defer payment until age 65.

Benefits are taxable in the year received. You may defer income taxes on a lump-sum distribution by electing a direct rollover to an Individual Retirement Account (IRA) or another qualified plan including a 403(a), 403(b) or 457 plan.

*** With the year almost over, I estimate my pension balance is closer to $15-16k. The chart uses a 6% interest rate which is what my employer recommends we use to estimate our balance.