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MIKE IN lINO III

401K options

14 posts in this topic

I have a 401k at an old employer and I am now quified to join my new employer 401k program.

My old employer is not in very good financial condition and I was told that there is a penalty ( fee ) to get my money if they go under.

My new employer is not in the best condition either and I really don't want to transfer the 401 into this company.

What are my options?

I don't want to do the self-directed version as I do not have the time to follow the market like I did before.

Any help would be appreciated.

Mike

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Roll it over into an IRA. Do it before you HAVE to cash it out, when you will need to pay penalty. There are plenty of places or people (financial advisors) who can do it for you. Easy to do, and no cost, other than normal "management" fees, depending upon where you go.

I can't give financial advice, or you would be in the poor house with me wink not really, but find some Mutual Fund you are comfortable with and let er ride. Just be careful of getting into anything with any excess fees, etc.

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Mike,

You can do a direct rollover from your old 401k to a regular IRA account with no tax consequences. If you have the funds disbursed to you, you have 60 days to setup the IRA or you will absorb penalties and taxes. Most efficient method is a direct transfer to an IRA, now you just need to decide who you want to handle your funds. The least attractive option is to leave it with your old employer. You do have the option to transfer to your new 401k program but if their program is suspect, you are better off having someone manage the funds for you, especially if you don't have the time yourself. Generally, most 401k providers offer few investment choices and little advice in doing so. If you have further questions, please let me know if I can help...and yes, this is what I do for a living...unless I am fishing:)

Dan

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Thanks guys,

There are about a billion options when it comes to Mutual funds so I am kind of lost.

Dan,

please contact me

Mstelter at Parkprint dot you know what.

Thx,

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I'd cash it out, seriously. I don't believe the market is in recovery, just preliminary staging for a triple dip without any sprinkles at all.

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Only problem with cashing out is you now pay penalty and tax if under 59 1/2. If you have 5-10 years, or longer, before you need the money, the most effective alternative is to reallocate and put yourself in holdings that fit your risk tolerance level.

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You don't need to buy new mutual funds or stocks if you don't want to. You can always leave it as "cash" with Schwab or somebody as an IRA and then turn it into something later. I believe you can also do CD's.

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Nothing wrong with a good mutual fund. My wife's emerging market fund had a 36% return over the last 3 months. I wouldn't waste your time with cd's.

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There's some good advice here, possibly some bad advice too (it all depends on your individual situation).

It really depends on your age and how soon you'll need the money, and how much risk you're comfortable with. Unless you like trying to time the market a diversified portfolio is probably the best way to go.

You can do a direct rollover with no tax consequences or penalties, as for what you roll the money into the options are virtually unlimited.

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I rolled one into an IRA at my bank. It's getting about 6%. Your bank needs to supply you with paperwork so that the 401 holder can transfer the money.

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Its been mentioned before but you need to separate the savings plan from the investment choices within the savings plan.

Rolling over your 401K to an IRA is probably a wise move from a tax and penalty perspective. You need to consider the value of the 401k and also the growth of your original investments however.

Once you have completed the rollover to the IRA you have virtully an unlimited amount of investment choices within your IRA. Cash, CD's, individual stocks, mutual funds, REIT's etc. You need to evaluate your own financial situation, your goals etc. when making your investment choices.

You could also convert the new IRA to a Roth IRA if you qualify but that is a another set of conversations.

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only advice I would have it what someone once told me, why leave your $ in a company you are no longer working for??

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