old retirement acct: total withdrawal vs higher annuity?

Hello. I hope someone can give me some sound financial advice. About a year ago, I resigned from a "state" job, which I had held for approximately 7 years. After a lot of procrastinating, I'm finally getting ready to rollover the retirement money into my new employer's

401K plan. I am going to simplify this, but basically my old employer is giving me 2 choices: Starting now, I can leave all the money in there ($13.5K) and receive a monthly annuity for life of $110.00. Or, I can withdrawal (rollover) the entire amount ($13.5K) and starting now receive a $60 monthly annuity for life. Keep in mind that I'm only in my mid 30s, so I have a good 30 or so years of work left. Something tells me I should go for the total withdrawal, rather than the higher annuity payment, but I would like for somebody to confirm (and maybe explain why) this would be a wiser choice. Of course, with the crappy economy right now, I have to admit that I'm scared to death that rolling the $13.5K over into the mutual funds that make up my current retirement plan, which has made me NEGATIVE 30% this year (as is the story with a lot of other people right now, I'm sure)! Any advise would be greatly appreciated. Thank you!
Reply to
gamefan72
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Yes - roll over to the IRA. An IRA is not a Mutual Fund, nor any specific investment. It is a 'box' labeled 'retirement account' (actually "individual Retirement Arrangement" for those who wish to catch me on a minor point) and can contain funds as you wish to shy away from, or CDs, T-Bills, T-Bonds, etc. For now, FDIC insured brokered CDs might make sense for you.

Joe

Reply to
JoeTaxpayer

If all your retirement money is in a 401k, Joe's advice works fine.

If, on the other hand, the employer has matching funds, which seems to be implied by the different annuities, it may be easier to take the higher annuity to reduce accounting problems. Can you delay the annuity to age 65 to get a larger amount?

-- Ron

Reply to
Ron Peterson

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