Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Preserving 401k
Old 01-31-2010, 12:13 PM   #1
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 57
Preserving 401k

I have been retired three years. 401k is split 50%-50% equity to bonds, all in Fidelity plan for General Motor retirees. Contrafund is 30%, Pimco core plus bond and Fid Capital and Income are the two main bond funds. With the limited funds available and wanting to preserve in what might be trouble ahead I was wondering what to do. There is a fund Promark Income that I think is similar to a money fund, seems safe, not sure. Also, even though I'm 60 was wondering if taking out 4% to 6% would be a good idea to preserve.
__________________

__________________
glinka 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 01-31-2010, 12:48 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,904
Is this a 401(k) plan and if so, why can't you roll it to Vanguard or elsewhere with more choices?
__________________

__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 01-31-2010, 12:54 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
You should be able to rollover the 401k to an IRA, that would give you more choices. Really easy if you stay at Fidelity. That's what I did. You might want to give us a list of your options if you would like to stay with the 401k.

I'd stay at 4% or below for withdrawals to preserve your portfolio, but even that has some risk. Keep reading the forums and you should get plenty of ideas. If you really need something closer to 5%-6% you may need to consider increasing equities instead of decreasing them.
__________________
Animorph is offline   Reply With Quote
Old 01-31-2010, 01:05 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
easysurfer's Avatar
 
Join Date: Jun 2008
Posts: 7,897
When I FIRE'd I had my 401K in Fidelity, but since I have most of my non-retirement funds in Vanguard, I rolled over both my 401K and pension into a Vanguard IRA. Vanguard even opened up some IRA accounts (International, Total Bond, money market) with zero balances as my IRA at the time was Total Stock. That way once rolled over, I was able to reallocate without issues. I found Vanguard very helpful with the process.
__________________
easysurfer is online now   Reply With Quote
Old 01-31-2010, 03:18 PM   #5
Recycles dryer sheets
 
Join Date: Dec 2009
Posts: 214
+1 to rollover to an IRA, you will have many more choices. My vote is for index funds at Vanguard but if you must go with active funds Fido is a good bet.

Personally I believe most of the trouble is behind us. Generational bear markets only come around once in, well, a generation.
__________________
chemist is offline   Reply With Quote
Old 01-31-2010, 03:40 PM   #6
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 57
If I rollover my 401k to Vanguard, do I want it into IRA, Roth IRA or 401k Roth or other? I haven't and don't need to withdraw any money yet. Was wondering if it was a good idea to take some anyway.
__________________
glinka is offline   Reply With Quote
Old 01-31-2010, 05:40 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Into an IRA retains the 401k character. No taxes due if you let the fund companies do a direct transfer. They are very similar. If you change to a Roth that's a taxable conversion unless you have a Roth 401k. There are minor differences between IRA's and 401k's that you might want to look at.

In general, the longer you can leave the 401k/IRA alone the better. I'll be spending my taxable accounts before touch my IRA's. That maximizes the tax benefits of those accounts.

You can convert to Roth IRA at any time, though there is a 5 year waiting period Roth restriction that might be important to you and favor a Roth conversion in the near future. No need to complicate things now. Especially if this is as far as your research has gone.
__________________
Animorph is offline   Reply With Quote
Old 01-31-2010, 07:12 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,904
Quote:
Originally Posted by glinka View Post
If I rollover my 401k to Vanguard, do I want it into IRA, Roth IRA or 401k Roth or other? I haven't and don't need to withdraw any money yet. Was wondering if it was a good idea to take some anyway.
Do you have any after tax money in your 401(k)? If so you can roll that to a Roth and roll pretax to a TIRA. Otherwise, roll everything to a TIRA. Vanguard will help you with the details.
__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 01-31-2010, 07:14 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,904
Quote:
Originally Posted by Animorph View Post
................You can convert to Roth IRA at any time, though there is a 5 year waiting period Roth restriction that might be important to you and favor a Roth conversion in the near future. No need to complicate things now. Especially if this is as far as your research has gone.
Doesn't this only apply if glinka is younger than 59 1/2?
__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 01-31-2010, 07:36 PM   #10
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 57
What would the difference be if I rolled to IRA in Fidelity as to Vanguard? I would be out of GM/Fidelity plan and into entire Fidelity field. Wouldn't I have the wider range of funds in Fidelity? Never dealt with Vanguard. Mainly interested in preserving what I have.
__________________
glinka is offline   Reply With Quote
Old 01-31-2010, 07:56 PM   #11
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Quote:
Originally Posted by travelover View Post
Doesn't this only apply if glinka is younger than 59 1/2?
I believe that is the prevailing interpretation.
__________________
Animorph is offline   Reply With Quote
Old 01-31-2010, 08:07 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Quote:
Originally Posted by glinka View Post
What would the difference be if I rolled to IRA in Fidelity as to Vanguard? I would be out of GM/Fidelity plan and into entire Fidelity field. Wouldn't I have the wider range of funds in Fidelity? Never dealt with Vanguard. Mainly interested in preserving what I have.
The main difference would be the availability of Vanguard or Fidelity funds, plus each has a slightly different lineup of third-party funds. Vanguard funds are generally cheaper. Both should have good funds for you. The customer service will be a little different. You can transfer any of your current funds that are not specific to only your 401k to a Fidelity account, an "in-kind" transfer. It took me one call to Fidelity to do my transfer.
__________________
Animorph is offline   Reply With Quote
Old 01-31-2010, 08:11 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,904
Quote:
Originally Posted by glinka View Post
What would the difference be if I rolled to IRA in Fidelity as to Vanguard? I would be out of GM/Fidelity plan and into entire Fidelity field. Wouldn't I have the wider range of funds in Fidelity? Never dealt with Vanguard. Mainly interested in preserving what I have.
Fidelity and Vanguard are both good choices. Vanguard tends to have lower expenses. Fidelity has brick and mortar stores for more personal attention. I moved some of my portfolio to Vanguard because they had a wider range of funds in the area that I was interested in.
__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 01-31-2010, 09:02 PM   #14
Thinks s/he gets paid by the post
Katsmeow's Avatar
 
Join Date: Jul 2009
Posts: 3,399
Depending upon where you live there may be differences in the legal protections given to funds in a 401(k) than in an IRA. You may want to look into that as well.
__________________
Katsmeow is offline   Reply With Quote
Old 02-01-2010, 11:51 AM   #15
Recycles dryer sheets
 
Join Date: Dec 2009
Posts: 214
Also if you have any company stock with a low basis you want to roll that into a separate self directed IRA because there are tax benefits to doing so - Google "appreciated company stock in 401(k)"
__________________
chemist is offline   Reply With Quote
Old 02-01-2010, 02:26 PM   #16
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 57
Luckily, no GM stock
__________________
glinka is offline   Reply With Quote
Old 02-01-2010, 06:38 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,451
Quote:
Originally Posted by chemist View Post
Also if you have any company stock with a low basis you want to roll that into a separate self directed IRA because there are tax benefits to doing so - Google "appreciated company stock in 401(k)"

It was a GM pension plan... although normally good advice.

Fortunately the OP doesn't have GM stock. Glinka how did you avoid having an GM stoc?. I thought they pushed stock ownership for employees
__________________
clifp is offline   Reply With Quote
Old 02-01-2010, 09:53 PM   #18
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 57
401k has options of funds including(ed) GM common stock. Not required to buy.
__________________
glinka is offline   Reply With Quote
Old 02-01-2010, 11:15 PM   #19
Recycles dryer sheets
 
Join Date: Mar 2007
Posts: 92
I've liked Fidelity for their good customer service and they do have a small number of index funds with low management expenses. I've rolled part of my Fidelity 401K into an IRA, but my 401K has a Fidelity stable value fund that has consistently paid more than money markets or shorter term CDs and seems very safe. The stable value fund (fixed fund) isn't availible outside of my 401k and I've left that portion in my 401k. Perhaps your Promark Fund is simiilar to this?

If you choose to rool ever to an IRA, you don't have to roll it all and may choose to leave some in the 401K if you'd like.
__________________
"Id like to live as a poor man with lots of money." Pablo Picasso
roger r is offline   Reply With Quote
Old 02-02-2010, 04:44 PM   #20
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 57
Are you refering to FDRXX, Fidelity cash reserves, when you mention a stable value fund?
__________________

__________________
glinka 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
Rolling a 401k into another 401k 'OR' Roth IRA? MrTux Young Dreamers 10 07-04-2009 04:30 PM
Preserving your wealth.... Art G FIRE and Money 32 11-07-2008 04:16 PM

 

 
All times are GMT -6. The time now is 03:56 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.