Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 11-02-2012, 07:48 AM   #21
Thinks s/he gets paid by the post
Finance Dave's Avatar
Join Date: Mar 2007
Posts: 1,026
Originally Posted by scrabbler1 View Post
Aren't there tax rules for doing a direct rollover from a 401(k) to an IRA? That is, you have to do the rollover within 60(?) days or else face tax penalties (even if you can recover the money later)? When I left my company, I had to liquidate my 401(k) and did a direct rollover into an IRA about a week after I got the check which was made out to the new IRA administrator (Fidelity) to shield me from any tax issues.

Therefore, doing DCA was not an issue because the rollover was a lump sum.
I think what he's saying is he could roll all of it at first into a "safe" fund such as money market, then move it via DCA to equities.

I don't think there's an exact answer for the timeframe...but I'd do it over about 9-12 months. That said....if we see a market correction of about 5-8% or more...I'd get it in there more quickly.

"Live every day as if it were your last, and one day you'll be right" - unknown
Finance Dave is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-02-2012, 07:52 AM   #22
bssc's Avatar
Join Date: Dec 2005
Posts: 9,151
I did a trustee to trustee transfer years ago. One thing to keep in mind is that in a 401(k) you can get at your money without a 72(t) if you are going to withdraw it from the year that you turn 55 until 59 1/2.

Angels danced on the day that you were born.
bssc is offline   Reply With Quote
Old 11-02-2012, 08:37 AM   #23
Thinks s/he gets paid by the post
Join Date: Nov 2009
Posts: 3,128
Originally Posted by pb4uski View Post
What was the $450k invested in (broadly, not tickers)? If in some broad based stock and bond funds, I would just dive right in and perhaps adjust to your target AA at the same time if it is a little out of whack. In other words, even if you think equities are high right now you are selling high and buying at the same level.
When I did my Rollover IRA in late 2008, I was faced with this same issue when I received the lump-sum check (not made out to me directly, of course) to present to the new trustee (Fidelity). By the time I emptied the 401(k) I had only 2 funds in there, an S&P 500 index fund and a stable return fund (which was most closely like an intermediate-term, investment-grade, corporate bond fund).

But I had forgotten to check the individual balances on the 2 funds on the day the 401(k) was emptied so I did not have the final AA I wanted to use to open 2 similar funds at Fidelity a week later. I did not think to call a rep at the 401k) trustee's office until the morning I went to Fidelity and he did not have that info readily available so I had to sorta wing it and make a best guess when I split the money up at Fidelity. Turns out I came pretty close, only 1-2% off from what it was (and I was okay with my "new" AA).

I could have simply dumped it all into Fidelity's cash account (Cash Reserves) and gradually bought shares of my desired funds. [ This appears to be more closely related to what the OP was asking about.] If I thought the rapidly unstable market was going to fall some more, this would have been a decent strategy as long as and forgone dividends would be recovered by buying at lower prices. I pretty much bought in at the bottom but then again I sold out (emptied the 401(k)) at the bottom, too.
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 11-02-2012, 10:24 AM   #24
Recycles dryer sheets
Join Date: Nov 2006
Posts: 89
As BSSC aluded to above, if you leave your company in the year you turn 55 (or later) and you think you might need some of the money in the 401K before 59 1/2, you can take distributions from the 401k without the 10% penalty. If you're younger than 55 (or over 59 1/2) then this wouldn't apply to you.

Also, if you have any Traditional IRAs that were non-deductible (i.e. have basis) that you are considering converting to a Roth IRA, you should probably do that before you move this 401k money to an IRA.
PatrickA5 is offline   Reply With Quote
Old 11-02-2012, 11:11 AM   #25
Full time employment: Posting here.
Join Date: Jan 2008
Posts: 738
Originally Posted by bssc View Post
I did a trustee to trustee transfer years ago. One thing to keep in mind is that in a 401(k) you can get at your money without a 72(t) if you are going to withdraw it from the year that you turn 55 until 59 1/2.
Yes, also, in my state, 401(k) distribution qualifies for retirement income exemption when you reach 65 -- IRA distn does not. If you roll 401(k) to IRA you may lose this exemption if this is only source of qualified retirement income.

jebmke is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


All times are GMT -6. The time now is 05:04 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.