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Don't Tempt Me

April 28th, 2009 at 04:12 am

I spent about an hour and a half last Friday morning dealing with my 401k. When I left my former employer several years ago I just left my 401k sitting there. About three years ago I decided that I really should roll my 401k over to an IRA and ordered the paper work to do so. I couldn't figure out how to allocate my investments, and I got busy and didn't follow through.

Now my procrastination is catching up with me. My former company was sold to another company, and the 401ks are getting moved to a different 401k plan administrator at the end of May. I have just a few short weeks to act, or face another layer of complication.

It turned out to be a relatively simple process to set up an IRA with an investment company (Mr H and I already have a mutual fund with them). I can put the assets of the 401k into a money market account while I figure out how to allocate them. (Note to self: don't procrastinate on asset allocation.) But there was a little wrinkle in my smooth rollover process. Before my 401k was a 401k it was some other type of savings plan which took post-tax dollars. So I had both post-tax dollars and pre-tax dollars in my account. If I put the post-tax dollars into my IRA I would have to fill out some tax form every year forever (or, I suppose, until those dollars were no longer in my account). I like simple. I do not want to do additional tax forms. I opted to have them send me those dollars as a check. (Note to self: Don't sit on the check.) Because they are post tax dollars there are no tax consequences for me.

While I was on the phone with the 401k person, after I told them to send me a check, they suggested all kinds of things I could do with the money including buying a new car. I ignored the suggestions, but that afternoon as I was accelerating down a long on ramp to get on the freeway I noticed that my car was decelerating. I had just enough time to pull over onto the shoulder of the on-ramp before all the lights came on on my dash and my car died completely.

As I sat in my car on the side of the road for over an hour waiting for the tow truck, I felt tempted by newer cars. But at this point I'm not going to give in. My current plan is to see if I can get my car to last until Daisy's high school graduation, then get a Vespa or something similar. My car is 16 years old, and Daisy has another 9 years before graduation. We'll see how this plays out.

3 Responses to “Don't Tempt Me ”

  1. lizajane Says:

    Could you rollover the post-tax dollars to a Roth IRA?

  2. boomeyers Says:

    Oh, a Roth! Good idea! You can get one for you and one for your DH too.

    I know what you mean about the cars. Of course you can keep it going, but it will cost you. The hard part is figuring the "when it cost more to fix it, than it does for a car payment" decision. Always a tough one!

  3. my english castle Says:

    I too am tempted by the Vespa. A condo development near us is scrambling to sell their units. They dropped their price by $20,000 and now have a lemony Vespa out front as a bonus if you buy a unit. It's so pretty!

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