My husband is a teacher and we have lived in 3 different states in my military career. The first state he was part time so did not have retirement contributions. However he has ~12K of unvested pension contributions in Illinois and is projecting to have ~48K unvested pension contributions in Nevada by the time we separate. The Illinois money is currently sitting and not doing anything, so I would like to move it ASAP. I would also like to move it before I get civilian pay and my income jumps as I anticipate moving up a tax bracket. It seems to me my options are
1.) Roll it into Roth IRA and pay taxes on it in cash. Not ideal for the 12K but manageable. However it will be way worse with the Nevada pension.
2.) Roll it into Traditional IRA and not pay taxes, but limits ability to do back door Roth in the future for him without hitting the pro rata rule.
3.) Ideally we would roll to a traditional 401K, but he will not have that as an option for teaching in Ohio. Unless we develop some small business so he can open a solo 401K.
Thoughts? Anything I’m missing?
What to do with spouse unvested pension contributions?
byu/SleepySunflower12 inMilitaryFinance
Posted by SleepySunflower12
1 Comment
Are you sure it’s ‘unvested’ and that you are using the correct word? Cause if that’s true it’s not your’s to do anything with anyway so it doesn’t matter. Unvested means that it still belongs to your employer, generally because you haven’t worked at a job for long enough to get full benefits.