Need Advice

[garrynky]

Hi folks,

I've posted here a few times before but haven't really explained my situation.

I'm 57, my wife is 55 and we are planning on working until I reach 59. I work in the energy business and had most of my savings in company stock (yep, dumb, hind site is perfect). I really had things lined out until Enron went down in 2001. When they went down, all energy companies were judged as villians, hince the downfall of the energy sector.

After my company stock headed up, I sold out when it reached an acceptable level. (I sold out too soon, it has doubled since then). Anyway, I wound up going with a financial advisor and I established a bond ladder. The ladder comes due in 2007 through 2010. I pay the financial guy .7% annually. I have $500,000 there of which $150,000 is in mutual funds. My wife and I have another $300,000 in company 401k's.

I want to get away from my financial guy and move funds to Vangaurd. I made sure when I made the contract that there aren't any gotchas with the investment firm. My $350,000 in bonds (returning about 4.5%) would give me about $342,000 if I sold out now.

So the long and short of this is I'm pondering if I should gradually phase the financial advisor out or just sell the bonds and go elsewhere. Anyone here been through a similiar experience?

Thanks for your comments and help.

[JPatrick]

One thing is for sure, your goal of getting over to Vanguard is sound.
Without knowing what is happening with your mutual funds etc, it is really* hard to figure this one.* If you have a Vanguard or Fido office near I'd plop myself down at one or better yet, both, and get some ideas.* It's free and you may well get more than you paid for.* At a minmum they may be able to transfer some of/all of your holdings so you can at least stop a portion of the bleeding for now and move on from there.

[grumpy]

garrynky,

I don't understand why you want to sell the bonds in the bond ladder. Have you decided that the bond ladder wasn't a good idea to begin with? If not, why would you take a loss now to move it to Vanguard rather than wait until maturity? Would your allocation be different if you did move it all to Vanguard? Just what are you trying to accomplish? Is it simply a desire to avoid the .7% fee to the advisor? It looks to me like the loss on the bonds, if sold now, would exceed the advisor fees (which would go down as the bonds in the ladder mature) you would pay through 2010.

Grumpy

[garrynky]

Grumpy,

I have just been thinking outloud trying to figure out long term how to manage our money. When we quit working in about 18 months we will move our 401k from our employer and our cash balance pension plan somewhere, possibly Vanguard. With that in mind, I am thinking I want to get out of my agreement with our current financial guy and move that money also. That money is also in a 401k.

It may make more sense to way until the bonds mature then move. Can I move partial funds from one 401 to another or do I have to move the entire account all at once?

Thanks,
Garry

[unclemick]

1-800-284-7245 ---press star----press 2. Open till 10 pm Eastern Time and 4pm on Saturday. Do not tell them unclemick sent you AND listen to Grumpy. Make sure you ask what amounts will kept you qualified for Voyager(or better) service.

heh heh heh

Pssst - in my 40's I had 7-8 VG funds, in my 50's* 4 funds, and this year(62/63) - 1 Target Retirement with a small MM for emergency cash. I also finally transferred a tiny 401k(Fidelity) from a temp job in 1995 to VG - lazy - but it was only 4-5k back then.

garrynky, I hold about 60% of my Portfolio in Bonds, I expect rates to rise, but I always hold a Bond until it matures, then just add another rung to the ladder.

I only sell a Bond if say for e.g, it is a high Yield?(aka Junk) and conditions change so that I can pick up a higher yield elsewhere, otherwhise I hold to maturity.

I have a fair amount of GMAC, now trading higher than what I payed, maturing in '09 and '10, I will hold unless they go much higher and I can find something better.

[grumpy]

Quote:

Originally Posted by garrynky It may make more sense to way until the bonds mature then move. Can I move partial funds from one 401 to another or do I have to move the entire account all at once?

Garry,

I'm pretty sure you can do a partial rollover from a 401(k) to a Vanguard IRA. However, I don't think you can roll a 401(k) to an IRA while you are still employed by the company whose 401(k) it is. I suggest you call Vanguard to confirm that. As I recall they were very helpful when I did a rollover of my wife's 403(b).

Grumpy

[SamHouston]

Federal law allows you to take a partial distribution on a 401-K even if you are still working for the company to which the 401-K applies. I'm not sure exactly how that calculation is done, but the plan administrator should be able to verify this for you in a matter of minutes via one phone call. I took a partial distribution from my 401-K at this company a couple of years ago and rolled it over into an IRA with some help from Ameriprise. I know several other people here who have done the same, in fact, because our plan's choices are limited and we wanted to have more control over the growth of the funds invested.