Leave money in pension or pull out to invest?

[mdcrim]

I have about $20,000 in a vested state pension plan and will be able to start taking that pension in 2029 which will equal about $300 per month. My question is this: would it be smarter of me to pull the pension out and move it to a rollover account to invest as I please? Could I make more if I did that or left the money in. I worry some about the stability of the pension plan in general given the state of the economy. Does anyone have an opinion?

[maat55]

I would not worry anymore about the stability of the pension than I would the stock market. I would look at return potential. I would pull it and put it in an stock mutual fund.

I'm not sure of the tax implications. But I think this is a great market to start investments.

[jIM_Ohio]

YES- something that small I would def pull out.

[Bernz]

That would be my suggestion too. Pull it out and invest it somewhere else. But make sure it's invested and not spent.

[snafu]

You have a 20 + yr. window to increase your principal. On retirement day you will not be motivated to withdraw your entire investment, it will need to continue to make money. As stated your payout will be $300. in 2029 and feel paltry if the past is any indication of the future [inflation, COLA etc]

More questions than answers...
Can you do a roll-over into a tax sheltered a/c without incurring a tax hit or fees? What is your risk tolerance? Are you willing to devote time to actively manage this account?

Most defined pensions have their funds invested in Government Bonds. Do you get/request an annual statement showing your contributions, employer's contribution and interest enhancement to total. With low interest rates during the past several years and threatening to go lower...enhancing the principal looks enticing if you can keep Capital Gains from being taxable.

I rolled-over a defined pension without incurring taxes or fees when that employer changed financial management . With active management I was able to enhance the balance substantively [taking a bit of a hit from high just now]. You need to be able to sleep at night without worrying about retirement 2029.

Have you read Coach Potato or Wealthy Barber? I suggest you work out an investment plan before taking any concrete action. I did the tactical 60% -30% - 10% split between stock, bond, high volatile mutual funds. Because we have such a teeny, tiny economy, these were re-split for lg. foreign mkts.

[Like2Plan]

2029 is a long time from now. Would be is there any chance you might go back to work for the state where you could substantially increase your pension amount? If you take a lump sum distribution, would they allow you to pay it back if you got another state job to count for creditable service? (Would they charge interest?).

Are there other benefits you would receive if you drew a pension? (such as reduced health ins premiums or long term care ins premiums)