Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Overwhelmed Help with Rollover
Old 06-16-2011, 12:39 PM   #1
Dryer sheet wannabe
TiredinTX's Avatar
 
Join Date: Jan 2008
Posts: 17
Overwhelmed Help with Rollover

Hi all, I haven't been around to post in quit awhile. Life happens. Appreciated all the past advise and once again find myself looking to you all for help.

I did read many blogs and books back in 2008, but we really didn't have enough saved to put my new found knowledge into practice as far as investing goes. By the looks of all the books I purchased and bookmark related finance sites, it would appear I should know more, but if you don't use it, you loose it! We focused on some other aspects of our finances and now have several exciting financial changes taking place at our home which should allow for much more focus on investments.

My husband, 63 is changing employers. I am 44. My previous posts can fill you in to the entire second marriage, starting over from scratch 12 yrs ago story.

At present I am really stressing myself out over what to do with the 401k and the pension held with his current employer.
My husband has never had interest in investing. I enjoy it, but just can't sort through all the different aspects and opinions you come across reading online. That is what I have been doing the last week and am finding it's just to much to process. For me it's clouding what should be an exciting positive change in our lives.

So there is 240K in the 401K. It consists of 11% company stock and the 89% in a stable value fund. Back several years it was more diversified and it always seemed everything was in the red. I was uncomfortable with that and just decided to worry about keeping what money we had safe rather than keep loosing it little by little. There is 86K in the Pension.

Obviously, we are not in a position for allot of risk with our investments due to my husbands age.

My understanding is most don't promote leaving money with the previous employer or in rolling it over to the new employer. So where is a safe place for it to go? Should it all go to one place?
Should the company stock we have not be rolled over due to some tax advantages?

Vanguard seems to be a top choice by many, but then I also read about it's high expenses for brokerage services. I also read that the brokerage is more protected then the fund manager portion of Vanguard which is what I think I would actually be interested in for conservative investments.

There are so many different types of investments, and places to invest, all with different fees, ugh. How do I sort through all these different aspects and choices? It would take forever to sort through all that and the histories of the potential choices. I'm looking to you all for help in getting it right.
__________________

__________________
TiredinTX 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 Early-Retirement.org 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 06-16-2011, 01:06 PM   #2
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,456
I'm sorry to hear it has been so overwhelming for you. One thing that jumps out at me is that you, understandably, want someone just to tell you what to do, and that is how people stay confused about their finances. No one cares as much about your money as you do.

Having said that, you really just need to start with the mechanics of the transfer rather than the whole enchilada of what to invest it in. Get that done, feel successful, then move on to asset allocation.

What I'd do is move the old plans to a new IRA in his name at a brokerage company like Fidelity or Schwab. By stable value fund do you mean money market? I would probably just move it as cash (sell the fund) and transfer the company stock in-kind.

Once the dust settles, you can spend some time researching what funds you want to own (or securities) and make the trades at that point that are commensurate with your experience and risk tolerance.
__________________

__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 06-16-2011, 01:06 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Vanguard sounds like a reasonable choice for you, and you can't go wrong with their index funds as a start. However, that requires you to determine an asset allocation and select a few funds to fill it out. As you can see from all the different and confusing advice, there is very little agreement as to what your asset allocation should look like. Pick one that makes sense to you and seems to match your risk tolerance, which seems very low.

However, you have two rather unique investments in your 401k, with stable value and company stock. You can't get anything like a stable value fund, as far as I know, outside 401k's. They're a pretty good deal for holding cash, so you might want to leave your 401k alone if you're going to hold that much in cash. And your company stock can receive special treatment if it has gains within the 401k, so it may be worthwhile to research that before doing anything with it.

So I'd say leave it alone until you decide you're ready to invest in something different. No rush if you're happy with what you've got.
__________________
Animorph is offline   Reply With Quote
Old 06-16-2011, 01:51 PM   #4
Full time employment: Posting here.
 
Join Date: Jan 2011
Posts: 575
You may want to check out the yield on your Stable Value Fund and compare it with what you can get outside your 401K if you move it. Some Stable Value Funds have yields better than CD's or MM. For instance, on my 401K, the SVF yield's is a little less than 4% while DW's is a little over 2%.

Also, 11% on a company stock is a little bit high. I think that the recommendation is less than 10%.
__________________
KingB is offline   Reply With Quote
401-k questions
Old 06-16-2011, 03:05 PM   #5
Confused about dryer sheets
BonitaK's Avatar
 
Join Date: Jun 2011
Location: Spokane, WA
Posts: 2
401-k questions

From my perspective, take a deep breath first, and step back a bit. Please go from your goals and objectives and really look at what you want to accomplish over the next segment of your lives, how you want income to come to you, how long is it going to be before he retires, etc etc. There are other ways of going about this with retirement income planning in mind. There are tons of products on the market, and yes - it can be very overwhelming! First figure out what path you are trying to go down-then that will help define what types of products you should be looking at. So....first sit down and analyze your planning objectives, and then go from there!
__________________
BonitaK is offline   Reply With Quote
Old 06-16-2011, 03:17 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Jan 2011
Posts: 1,207
Yes, it can be overwhelming. But if you call Vanguard, Fidelity, or whomever you choose of the big names, they can take a lot off your shoulders.
Tell them your immediate goals (for now, nothing other than "plain vanilla") until the dust settles and you are more confident to tackle any possible changes.
They can give you some general suggestions.
If in doubt, reiterate you want complete safety and no volatility until you feel ready to change that.
__________________
mystang52 is offline   Reply With Quote
Old 06-16-2011, 03:26 PM   #7
Dryer sheet wannabe
TiredinTX's Avatar
 
Join Date: Jan 2008
Posts: 17
Quote:
Originally Posted by mystang52 View Post
Yes, it can be overwhelming. But if you call Vanguard, Fidelity, or whomever you choose of the big names, they can take a lot off your shoulders.
Tell them your immediate goals (for now, nothing other than "plain vanilla") until the dust settles and you are more confident to tackle any possible changes.
They can give you some general suggestions.
If in doubt, reiterate you want complete safety and no volatility until you feel ready to change that.
I did call Vanguard yesterday and did indicate that. I was just unsure how much weight to put in their advise. I am concerned with the fees and what I am not knowledgeable enough about to ask about. What are the important questions to ask these places?
__________________
TiredinTX is offline   Reply With Quote
Old 06-16-2011, 03:47 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,871
Quote:
Originally Posted by KingB View Post
You may want to check out the yield on your Stable Value Fund and compare it with what you can get outside your 401K if you move it. Some Stable Value Funds have yields better than CD's or MM. For instance, on my 401K, the SVF yield's is a little less than 4% while DW's is a little over 2%.

Also, 11% on a company stock is a little bit high. I think that the recommendation is less than 10%.
Good advice. If you are really that risk adverse, you probably won't get a better return than a SVF right now, outside a 401(k) plan.

I would not hold that much company stock. I'd sell it and buy a stock index fund like Vanguard's Total Stock Market, if you want some stocks.
__________________
Yes, I have achieved work / life balance.
travelover is offline   Reply With Quote
Old 06-16-2011, 03:56 PM   #9
Dryer sheet wannabe
TiredinTX's Avatar
 
Join Date: Jan 2008
Posts: 17
Quote:
Originally Posted by KingB View Post
You may want to check out the yield on your Stable Value Fund and compare it with what you can get outside your 401K if you move it. Some Stable Value Funds have yields better than CD's or MM. For instance, on my 401K, the SVF yield's is a little less than 4% while DW's is a little over 2%.

Also, 11% on a company stock is a little bit high. I think that the recommendation is less than 10%.
The SVF is about 3% yr. Although, I decided to grow some this afternoon and moved all the money in the SVF to the 2015 retirement fund. It is getting about 10% yr. I think I may just wait to do any moving around with the retirement until the dust settles from all the other job related shifting such as ins. etc. At first I thought we had to roll it and had 60 days to do it. I now understand that it is only after you start the transfer process that it has to be completed in 60 days, so I'm feeling less stressed about it.
__________________
TiredinTX is offline   Reply With Quote
Old 06-16-2011, 03:59 PM   #10
Dryer sheet wannabe
TiredinTX's Avatar
 
Join Date: Jan 2008
Posts: 17
Quote:
Originally Posted by BonitaK View Post
From my perspective, take a deep breath first, and step back a bit. Please go from your goals and objectives and really look at what you want to accomplish over the next segment of your lives, how you want income to come to you, how long is it going to be before he retires, etc etc. There are other ways of going about this with retirement income planning in mind. There are tons of products on the market, and yes - it can be very overwhelming! First figure out what path you are trying to go down-then that will help define what types of products you should be looking at. So....first sit down and analyze your planning objectives, and then go from there!
Advise received!
__________________
TiredinTX is offline   Reply With Quote
Old 06-16-2011, 04:17 PM   #11
Recycles dryer sheets
Packman's Avatar
 
Join Date: Jan 2011
Location: Phoenix
Posts: 303
Quote:
Originally Posted by TiredinTX View Post
The SVF is about 3% yr. Although, I decided to grow some this afternoon and moved all the money in the SVF to the 2015 retirement fund. It is getting about 10% yr.
I'm not sure I understand your statement above, but nothing is getting about 10% yr., unless you meant it grew 10% in the last year, which is possible. A 2015 retirement allocation fund is probably invested at about 50% equities.

I am going through the same process as you are with regard to possibly rolling my 401k fund to an IRA. I'm using Fidelity, but Vanguard and Schwab will work as well. I would talk to all of them. With $240k, they will be interested in your business and you will learn something from each of the conversations. But there is no rush, only move forward when you feel comfortable.
__________________
Retired on 5/31/2011 at 54
Packman is offline   Reply With Quote
Old 06-16-2011, 04:19 PM   #12
Dryer sheet wannabe
TiredinTX's Avatar
 
Join Date: Jan 2008
Posts: 17
Quote:
Originally Posted by Sarah in SC View Post
I'm sorry to hear it has been so overwhelming for you. One thing that jumps out at me is that you, understandably, want someone just to tell you what to do, and that is how people stay confused about their finances. No one cares as much about your money as you do.

Having said that, you really just need to start with the mechanics of the transfer rather than the whole enchilada of what to invest it in. Get that done, feel successful, then move on to asset allocation.

What I'd do is move the old plans to a new IRA in his name at a brokerage company like Fidelity or Schwab. By stable value fund do you mean money market? I would probably just move it as cash (sell the fund) and transfer the company stock in-kind.

Once the dust settles, you can spend some time researching what funds you want to own (or securities) and make the trades at that point that are commensurate with your experience and risk tolerance.
A SVF is only offered through 401Ks, it's a fund with conservative investments and doesn't gain much or loose much either.

The retirement rollover is not in itself not the total reason for my feelings of being overwhelmed. There are many other housekeeping issues that go along with a job move. Life ins, health ins, etc. Plus, my son was accepted to a physical therapy program and we are in the process of relocating him from our home to another city. I have paperwork overload! Granted these things are all fantastic changes for our household and the coming months hold even more since we will finally be done paying 2K in monthly alimony in Jan. 2012!

Really not looking to be told what to do, but for someone to help me see where I should be focusing my learning and where I should not based on the situation. I'm sure there are some investment brokers and investments that based on xyz factors I should not even be wasting my time worrying about.
__________________
TiredinTX is offline   Reply With Quote
Old 06-16-2011, 04:26 PM   #13
Dryer sheet wannabe
TiredinTX's Avatar
 
Join Date: Jan 2008
Posts: 17
Quote:
Originally Posted by Packman View Post
I'm not sure I understand your statement above, but nothing is getting about 10% yr., unless you meant it grew 10% in the last year, which is possible. A 2015 retirement allocation fund is probably invested at about 50% equities.

I am going through the same process as you are with regard to possibly rolling my 401k fund to an IRA. I'm using Fidelity, but Vanguard and Schwab will work as well. I would talk to all of them. With $240k, they will be interested in your business and you will learn something from each of the conversations. But there is no rush, only move forward when you feel comfortable.
Yes, 3% & 10% growth in the last yr. Sorry I don't know the terms. Took that info from the fund performance sheets.
__________________
TiredinTX is offline   Reply With Quote
Old 06-17-2011, 05:12 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Originally Posted by Animorph View Post

However, you have two rather unique investments in your 401k, with stable value and company stock. You can't get anything like a stable value fund, as far as I know, outside 401k's. They're a pretty good deal for holding cash, so you might want to leave your 401k alone if you're going to hold that much in cash. And your company stock can receive special treatment if it has gains within the 401k, so it may be worthwhile to research that before doing anything with it.

So I'd say leave it alone until you decide you're ready to invest in something different. No rush if you're happy with what you've got.
I hate to confuse you further but what Animorph says is correct, you have two unique and rather valuable investments. So while normally it is good idea to roll a 401K over into an IRA, in your case I would be in no hurry.

Regarding your company stock. In most cases you will be better off transferring the share of the stock to a a traditional brokerage (Schwab, Fidelity, Vanguard Brokerage etc.) account. Then selling the stock in the brokerage. Doing so should save you hundreds if not a thousand or more in taxes. (In my case the figure was a few thousand).
You should check with your old 401K administrator, the key buzz words are Net Unrealized Appreciation or NUA, and direct stock transfer. If they administrators are confused and have no idea what you are taking about come back and I'll give you more information and some more pointers. The more likely case is they'll give you some paperwork to fill out.
__________________

__________________
clifp is offline   Reply With Quote
Reply


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


Similar Threads
Thread Thread Starter Forum Replies Last Post
Do you sometimes feel overwhelmed... kyounge1956 Other topics 27 03-15-2010 09:24 PM
Rollover Advice? cc3159 FIRE and Money 4 07-13-2009 06:21 PM
Young and a bit overwhelmed have been getting into investing this weekend LOTS of ?s shinymoney FIRE and Money 16 10-14-2008 01:00 AM
Rollover? lets-retire Young Dreamers 4 08-05-2008 07:25 AM
Rollover and 72t bow-tie FIRE and Money 3 03-27-2008 12:53 PM

 

 
All times are GMT -6. The time now is 04:04 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.