Hello this is my first post. I currently have about 2000 dollars into a PERF account for retirement. I just received a new job that does not use PERF, what should I do with this money. Any advice on putting it somewhere else for retirement? Thx

According to your state website, these are your options. It sounds like it is very much like an IRA account with similar rules. I would not recommend 2,3,or 4 since eventually you will want to have the money in a personal account that you are controlling. If you are not in a high tax bracket, you might consider paying the taxes and rolling it into a ROTH account. This will amass the greatest distribution dollars:

1. Roll your retirement funds into an IRA. This gives you the greatest flexibility and protection from taxes, as well as the benefits of tax-deferred growth. However, if you are vested with PERF, you will lose your right to a lifetime pension benefit if you withdraw your funds from PERF. To avoid penalties, your retirement plan assets must go directly into an IRA - not to your bank or other accounts - within 60 days after you receive the money. Otherwise, your plan is required to withhold 20 percent of an eligible rollover distribution for taxes. You will then have to make up the 20 percent when you open your rollover account and pay a 10 percent penalty tax on the amount. If you decide to roll your retirement plan assets into an IRA, your money must go into a regular IRA, which you can convert later to a Roth IRA.
2. Roll the money over to a new employer's retirement plan. This option can help you keep your retirement savings on track. Keep in mind that the investment options in the new plan will be different from those in your old plan. Also, if you are vested, you will lose your right to a lifetime pension benefit.
3. Leave the money in the existing plan. If your vested account balance is $5,000 or more and you're under the plan's normal retirement age - usually age 65 - you can leave your money where it is. Taxes won't be due until you withdraw money from the account.
4. Take a lump-sum distribution.This gives you the freedom to do whatever you want with the money. But beware: at the time you cash out, you will owe all applicable taxes. If you're younger than 59-1/2, you'll pay a 10 percent penalty plus state and federal income tax on the full amount of your distribution (including the penalty.) This choice may also affect your ability to receive unemployment compensation, so check with your state. Also, if you are vested, you will lose your right to a lifetime pension benefit.

I would have to say the #1 would be your best option. I would in know way do #4. You get socked with the taxes on that one.

this is my first time with dealing with anything like this, what should I expect from an IRA? what will it bring me in 20 years of just sitting there?

Complicated questions.

The answer, is simple. Just as Mark A posted in one of the other posts, the answer is: It Depends.

In a seminar the other week, I asked the group to give me a hypothetical rate of return they would expect to get from their mutual funds over 20 years. I got answers as low as 3% and as high as 16%. What people "expect" and reality are two entirely different things.

So here's an easy way to figure out how much that $2k could grow to. Use the rule of 72. The way this works is that if you divide the rate of return into the number 72, it will tell you how many years it should take your money to double. (this only works with lump sums. you need a financial calculator if there is periodic contributions like a 401k)

For example, if you expect a 6% rate of return, here is the math:
72 divided by 6 = 12
So if you get a 6% rate of return every year, your $2k would double every 12 years. So in 20 years, you'd have something like $6400.
If you could get a 12% rate of return every year, your $2k would double every 6 years (72 / 12 = 6). Then you would have something like $19292.

If you want to see why the IRS loves you, here's why. Let's say you choose a Roth IRA instead of a traditional IRA. And let's say you are in a 35% total tax bracket now AND in retirement.

If you paid taxes today, the IRS would get $700, leaving you with $1300 to invest in the Roth IRA. That $1300 at 12% rate of return would grow to $12540. You would owe no taxes on this $12540.

If you use the traditional IRA, the IRS would get $0 today, leaving you with $2000 to invest. That $2k at 12% rate of return would grow to $19292. When you take this money at retirement, you'll pay the IRS $6752, leaving you with the same $12540!

But take a close look! In scenario 1, the IRS got only $700. In scenario 2, the IRS got $6752. You basically grew the money for the IRS using your own investments. And if tax brackets go up in the future, they'll profit even more.

Chris