So the Dow is up over 400 points today, after last week’s bizarre drop. This worked out nicely: the rollover I made from GDU’s 403(b) to the big, professionally managed IRA arrived in Stellar’s precincts just as stocks were headed south. With any luck, the boys will have bought a lot of stuff on the cheap which is now worth a ton of money.
With any luck. But…
But I don’t like it. I don’t like volatility in general, and this particular spasm of volatility is hugely whim-whammish. Volatility tends to presage pullbacks, slowdowns, not-getting-rich periods. Yea, verily, losing pretend-money periods. Check out this interesting podcast, which pretty much reflects my sense. “Like he said.”
Yesh. A couple of weeks ago, I finally figured out how to get around the state’s prohibition on moving my money (my money, goddammit) from the university’s 403(b) plan to my IRA, where a broad spectrum of wisely calculated investments in blue chips vastly outearns the staid mutual funds that have held 16 years of retirement contributions.
As you may recall, the bureaucrat who directs the state’s RASL program (whereby the state ponies up almost $20,000 worth of unused sick leave earnings over a three-year-period) announced that if I rolled my 403(b) savings she would declare me “not retired” and deny payment of this valuable benefit. Since my traditional IRA has been known to earn as much as $8,000 in a month—but more typically makes about $1,800 to $2,000—we’re talking about sacrificing a substantial increase in potential extra earnings, probably enough to wash the 20 grand of RASL. Intensely annoying.
Well. Duh! The trick is to leave enough cash in the 403(b) to cover the drawdown until February 2012, when the last of the three RASL payments will be issued. That, in the large scheme of things, isn’t very much: only about $11,000.
So I emptied TIAA-CREF, which still held a little in an annuity that I mistakenly thought could not be rolled into Vanguard (which the university swapped into Fidelity when it dropped the Vanguard option a year after offering it), and then I rolled all but 11 grand out of Fidelity to the big IRA. This moved about 155 grand into the better-performing instrument. The bulk of that arrived in the cash fund last week.
Naturally, I was not happy to see the market take an all-time record-breaking dive. Now I feel better, at least temporarily. But I remain wary.
Nor was I pleased when the latest factotum I reached at Fidelity remarked that a lot of university retirees use this strategy to rescue funds from underperforming 403(b)s. How many times did I discuss this with how many other corporate bureaucrats there? How many of them told me they’d never heard of the State of Arizona’s you-can’t-take-it-with-you rule? And how much would I have been helped if the first guy I reached there had suggested doing this, rather than my having to figure it out on my own over three months of cogitation?
We’re in the money, we’re in the money
We’ve got a lot of what it takes to get along.*
…for the nonce.
*The Gold Digger’s Song, by Harry Warren, 1933