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Being Laid Off
Old 01-23-2019, 05:11 PM   #1
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Being Laid Off

Hello all! I stumbled across this site last week and boy am I impressed with all the knowledge and info. I can't stop reading on here.

Here is my scenario and I was hoping to get some good advice from all the "seasoned" investors/retirees. I'm 45 been with a mega corp for 20 years contributing to a 401k. I have no debt, house and all cars are paid for and we don't really live above our means, I would say we are frugal. When I get severed from the company I know I will have to roll the pension and 401k somewhere and that is one of my questions, where or what to do with it? I'm really inexperienced with all the investment strategies and seems like a lot to absorb. Oh, I wouldn't mind retiring in the near future if some of you think that would be possible with my paltry sum!!

Thanks, Bandit

$220k in 401k--Fidelity
$26k in Roth---Fidelity
$95k in pension
$77k in Quick Silver money market at credit union
$11k between checking and savings at credit union
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Old 01-23-2019, 05:16 PM   #2
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Quote:
Originally Posted by OrangeBandit View Post
Hello all! I stumbled across this site last week and boy am I impressed with all the knowledge and info. I can't stop reading on here.

Here is my scenario and I was hoping to get some good advice from all the "seasoned" investors/retirees. I'm 45 been with a mega corp for 20 years contributing to a 401k. I have no debt, house and all cars are paid for and we don't really live above our means, I would say we are frugal. When I get severed from the company I know I will have to roll the pension and 401k somewhere and that is one of my questions, where or what to do with it? I'm really inexperienced with all the investment strategies and seems like a lot to absorb. Oh, I wouldn't mind retiring in the near future if some of you think that would be possible with my paltry sum!!

Thanks, Bandit

$220k in 401k--Fidelity
$26k in Roth---Fidelity
$95k in pension
$77k in Quick Silver money market at credit union
$11k between checking and savings at credit union
Don't forget to apply for unemployment and make sure to apply for Cobra before you leave. Since you are still employed get all your medical stuff including any surgeries taken care of while you are still on the payroll.
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Old 01-23-2019, 05:17 PM   #3
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First question.
What is your spending?
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Old 01-23-2019, 05:37 PM   #4
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OrgangeBandit posted "When I get severed from the company I know I will have to roll the pension and 401k somewhere and that is one of my questions, where or what to do with it?"

Fidelity will be able to help you with direct IRA rollovers with no 10% penalty. You may be able to leave the 401k balance where it is - it will depend on the wording in your company's Summary Plan Document.
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Old 01-23-2019, 05:41 PM   #5
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OrgangeBandit posted "When I get severed from the company I know I will have to roll the pension and 401k somewhere and that is one of my questions, where or what to do with it?"

Fidelity will be able to help you with direct IRA rollovers with no 10% penalty. You may be able to leave the 401k balance where it is - it will depend on the wording in your company's Summary Plan Document.
If one has a decent paying "Stable Value" account in their 401k, then it might be worth it to keep it and not roll it over as part of a Fixed Income allocation portion of your AA.
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Old 01-23-2019, 05:47 PM   #6
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If one has a decent paying "Stable Value" account in their 401k, then it might be worth it to keep it and not roll it over as part of a Fixed Income allocation portion of your AA.
That is no reason to leave funds in a 401k, as you can easily buy stable value mutual funds in an IRA.
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Old 01-23-2019, 06:07 PM   #7
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That is no reason to leave funds in a 401k, as you can easily buy stable value mutual funds in an IRA.
One reason may be ERISA protection, depending on your state. There is a thread on the forum discussing 401k rollover question...

Leave 401K in Vanguard or roll over to Vanguard IRA?
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Old 01-23-2019, 06:08 PM   #8
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That is no reason to leave funds in a 401k, as you can easily buy stable value mutual funds in an IRA.
What kind of GIC/Stable Value insurance wrapped products can one buy in an IRA?
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Old 01-23-2019, 08:24 PM   #9
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Time is your ally, and you're still very young. Let's pray the equity market will quickly improve and that compounding of your investment is good to you.

You've done much to this point that is very good--no debts and keeping a frugal lifestyle (like many of us.)
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Old 01-23-2019, 09:48 PM   #10
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That is no reason to leave funds in a 401k, as you can easily buy stable value mutual funds in an IRA.
I don't think this is right.... though money market fund yields have crept up but are still typically significantly lower than stable value funds.
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Old 01-23-2019, 09:55 PM   #11
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Welcome Bandit. Sadly, you don't have enough to retire at 45 unless you can live on $1k a month, but I suspect that you already knew that.

As others have mentioned, don't presume that you have to roll your pension or 401k into a IRA... you may not need to and it might be better not to but it is hard to know without more details.

While some of us here get a bit anal about investing, the reality is that with today's target date retirement fund you can do it with a single fund if you chose to... or probably a stock fund and a fixed income fund.

It's not rocket science and we are here to help and learn from each other.
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Old 01-24-2019, 04:22 AM   #12
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Sadly, you don't have enough to retire at 45 unless you can live on $1k a month, but I suspect that you already knew that.
+1
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Old 01-24-2019, 04:43 AM   #13
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Unfortunately I know I will have to keep working but I think I'm DONE with the corporate BS. I can get by on $1000 per month and that includes all utilities, home & auto insurance, taxes and groceries. The only thing not figured in is healthcare and that is really why I need to keep working(in my eyes) which is sad. Well, maybe the occasional house or car repair bill. I can cut the cord on Satellite & Internet and probably save $150 per month.
I just want to put my money where it will continue to grow without having to constantly monitor it. My parents always told me to put my money in the 401k and just let it sit and there will be UPs and DOWNS but over time it will all average out. Do you think this is a correct statement about the ups and downs?


Thanks for all the advice so far. I will need to look into COBRA. I would like to get on the Obamacare bandwagon for a while!!
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Old 01-24-2019, 07:49 AM   #14
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What kind of GIC/Stable Value insurance wrapped products can one buy in an IRA?
You did not specify that you were talking about an insurance product. I was interpreting "stable value" to mean an investment that maintains a $1.00 share price, like a money market mutual fund.
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Old 01-24-2019, 08:02 AM   #15
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You did not specify that you were talking about an insurance product. I was interpreting "stable value" to mean an investment that maintains a $1.00 share price, like a money market mutual fund.
Okay all good then.
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Old 01-24-2019, 08:15 AM   #16
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Originally Posted by OrangeBandit View Post
Unfortunately I know I will have to keep working but I think I'm DONE with the corporate BS. I can get by on $1000 per month and that includes all utilities, home & auto insurance, taxes and groceries. The only thing not figured in is healthcare and that is really why I need to keep working(in my eyes) which is sad. Well, maybe the occasional house or car repair bill. I can cut the cord on Satellite & Internet and probably save $150 per month.
I just want to put my money where it will continue to grow without having to constantly monitor it. My parents always told me to put my money in the 401k and just let it sit and there will be UPs and DOWNS but over time it will all average out. Do you think this is a correct statement about the ups and downs?


Thanks for all the advice so far. I will need to look into COBRA. I would like to get on the Obamacare bandwagon for a while!!
Great attitude. Listen to all opinions including the naysayers and prove them wrong!
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Old 01-24-2019, 08:49 AM   #17
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Would it be a wise decision at this age in life to start putting more money into my Roth account?
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Old 01-24-2019, 10:37 AM   #18
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Would it be a wise decision at this age in life to start putting more money into my Roth account?
If you have a low income it's worth it.
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Old 01-24-2019, 11:32 AM   #19
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If you have a low income it's worth it.
What is considered a "low income" and how or why does that matter if I put if I put money in a ROTH? Just curious and trying to learn here!!!
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Old 01-24-2019, 02:10 PM   #20
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What is considered a "low income" and how or why does that matter if I put if I put money in a ROTH? Just curious and trying to learn here!!!
All of the contributions made to a ROTH can be withdrawn at any time, tax and penalty-free. Only capital gains on those contributions earn penalties if withdrawn early. Over the long term, ROTH tends to win in total value over tax-deferred accounts, but your current and future tax rates affect the outcome. Higher income folks tend to benefit more by investing in tax-deferred (401(k) or traditional IRA), as the contributions lower their current tax rate; once again, this is only a very general statement, and does precisely evaluate current and future tax rates; there are ROTH vs. IRA calculators you can use to determine which is best for you. Most of us here try to max out the tax-deferred contributions first (401(k)), then contribute to a ROTH if allowed.
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