Hello -

The wife is a former teacher in Ohio, we now live in VA and do not plan to return.  We just received an account summary from the OH State Teachers' Retirement System that she contributed 7k to a tax-deferred non-matched account and the she 'may be eligible to withdraw [her] account value in lieu of a retirement benefit if you cease public employment in OH.'  

So wow, she wasn't aware of this account, but I'm assuming this is similar to a 401(k) or TSP account (or kind of like the Traditional IRA) and I would like to keep the funds for in a tax-advantaged account rather than cashing out.

Anyone with experience in this?  Do I need the services of a financial planner or can I call up Vanguard and have them help me out?


Thanks in advance!

YES.

Most public pensions are like this from what I can tell (mine is).  If she wasn't in it long enough to be vested, then her contributions can be refunded.  If you take those funds directly and keep them you will be taxed on the distribution.  Her best bet is to have that information in hand and contact Vanguard.  You will want to take this money and roll it over to a Traditional IRA (putting it in a Roth IRA will result in a taxable transaction).  From there you can pick and chose mutual funds to invest this money.  You will want to do this as soon as you can, chances are her contributions are not earning anything and only her exact contribution will be refunded, so you might as well get that money where it will be invested and working for you.

Had to do this myself. Get them to cut a check and then either fund a traditional IRA with it or roll it over to a 401K or 457 plan if she has one available. You have to do it within 60 days of the check being cut and fill out a simple IRS form for the new investment.   I took the money and opened a scottrade IRA account with it and use it to play in the stock market. As long as I don't contribute anymore money to it (income thresholds) or pull any money out, no capital gains. In a little over a year I made 27% despite a couple of poor buys and transaction fees.

contact company that is managing the account.

tell them you want to rollover to another institution IRA account

they will probably make you fill out some forms and sign and send back

have your brokerage IRA account details you want funds transferred to ready. etrade/tdameritrade/etc...take your pick

the money usually traansfers electronically. You dont get a physical check or need to deposit anything