Fast 401k Rollover options?
My employer recently went bankrupt. I got this letter at the end of the year stating that my 401k plan would change to Merrill Lynch. They let me know that I can take a lump sum (with the standard 10% early withdrawl fee) or just leave it in there. I left it in there. Yesterday, I noticed a letter from Merrill Lynch welcoming me to their new plan and gave specific details that I was never told. It was loaded with fee upon fee:
*$50 annual fee
*$15 quarterly fee (since my account is below $20k)
*even a significant termination fee if I decide to leave
My previous 401k had NO FEES. None of the fees were described before the funds rolled over. Now if I don’t roll it over today, the termination fee goes up another $25 (increase in Feb 2010). How can I quickly rollover the funds? Can I just take a lump sum (to get the transfer started) and re-invest in a Brokerage IRA or would I be limited to the $5k/year limit unless I rollover direct from one bank to another? I don’t think I can get a new IRA account started in just a day.
Common Retirement Investment Options
Well, did you ever think your retirement would come so soon? Maybe you are not quite there yet and are thinking about common retirement investment options. Whichever it may be, you need to secure your dreams. Most retirees have about $100,000 in their retirement fund.
If you were to calculate and do extensions of cost analogy, you will find you will need more than that. So, what will you do to get the best out of your retirement and how consider common retirement investment options?
Let’s consider some of the following criteria:
What is your risk tolerance?
What is your age?
How long do you have before you retire?
What can you afford to put into your retirement?
You must pay yourself first as you would pay a monthly bill
You want to choose what will suit you best. When you meet with a professional financial specialist to discuss common retirement investment options, keep in mind what’s available to you. For example: 401K, Traditional IRA, Roth IRA, Profit Sharing (if available, employer decides each year whether contributions will be made), ESOP (employee stock option plan where employer contributes to your fund
in stock), 403b, 457, Keogh, SEP ( Simplified Employee Pension (self employed).
Your common retirement options should be taxed deferred in a qualified plan. Qualified being it is an approved IRA. As the above list gives you different common retirement investment options, each has
diversification as to where and what you can put your monies. You can choose mutual funds, stocks, bonds, certificate of deposits (C.D.’s), REITS (Real Estate Investment Trusts). Keep in mind if you are fortunate to have an employer sponsored plan, dive into it. It’s FREE
money to you when they contribute to your common retirement investment options.
Tax deferred plans allow you to defer payment of income taxes until you actually withdraw funds during retirement. This provides a double advantage. You save on your tax bill and invest at the same time. If you choose a Roth IRA, your contribution will be taxed now. The best part is withdrawals are tax free including earnings. You do not have to start your required minimum withdrawals at 70 ½ years of age as with a Traditional IRA.
You can now (depending on your age) individuals 50+ can make additional catch-up contributions. Whatever you decide for your common retirement investment options, be sure to consult with a financial specialist. Check their credentials, certifications, degrees
and experience. Don’t be shy when it comes to your common retirement investment options because these are your future dreams.
& lt; /p& gt; & lt; p Ric Dalberri a graduate of the Columbia State University and has in its own business involved is busy (sold) over 100 coworkers. As & lt; /p& gt; also as a Top producer as Financial Specialist for over one decade with one of the largest financial establishments in the USA & lt; p& gt; Ric has many years experience in selling and management. Ric was also a Mentor in & lt; /p& gt; the financial range as well as a volunteer teacher for junior Achievement. & lt; /P& gt;
Forced Rollover. What options?? Suggestions?
Husband lost job. Forced rollover to a IRA/bank that has a penalty for any transfer, even another qualified IRA/different company, for the next 20 years. I’m not happy with this. Any suggestions?? I would like the ability to transfer to another IRA IF I am unhappy with whatever Company you suggest, but would prefer to leave it there until retirement in 20 years. Options are good. I don’t like being backed into a corner. Only option this company allows is a money market which pays crap, or a CD. I don’t mind a CD, but since no options exist to ever get into stocks, other investments later, I feel cornered. The only way there isn’t an EXTRA penalty imposed by bank (not counting IRS penalty depending on age) is if it is distributed to me. Even if I’m 65 and want to transfer to another company, there is STILL a penalty on the transfer. Sounds like legal thievery to me. I got notice of this forced transfer on Friday, it says I have 7 days to transfer without penalty. Sell me on your choice. Tell me what you have and if you are happy with it. It is a small amount, but probably over any minimum that an IRA would have. May consider combining other retirement account with it, but for now, it is only a small amount.
Consider options with 401(k) when changing jobs
Take control of your 401(k)
With the unemployment rate at 9.5 percent, real unemployment in the double digits, and shadow unemployment even higher, there is a lot of your money parked in your ex-employer’s 401(k) and profit-sharing retirement plans.
Read more on Portsmouth Herald
Refinancing an underwater mortgage?
Refinancing a mortgage (question 3) and getting out from under backbreaking student loans (question 9) feature in today’s reader mailbag.
Read more on The Christian Science Monitor
Roth IRA conversion often makes much sense
Q: Dear Rick: I will retire at the beginning of next year. I will have money from my 401(k) plan which I plan to roll over into an IRA. I was at your recent Farmington Hills Library talk and you gave me some good ideas about how to invest the money. However, my issue now is whether I should convert the money into a Roth IRA. I figure I won’t need the money from my IRA for at least 10-15 years …
Read more on Redford Observer
Consider options with 401(k) when changing jobs
One of the most important decisions you will make when you get a new job is whether to take your 401(k) savings with you. That is, you must…
Read more on Seattle Times
OPTIONS FOR TAKING MONEY OUT OF A ROTH: Explaining some of the intricacies of withdrawals
Sometimes people want to access Roth IRA funds for early retirement or other purposes. Maybe you’re one of them. If you have ever thought about taking money out of a Roth IRA, be sure to consult your financial advisor first before you make a move ⦠and keep the factors mentioned below in mind.
You can withdraw regular contributions tax-free, but not your earnings. This is a critical distinction, and many Roth IRA owners don’t seem to know about it.
When you withdraw assets from a Roth, there is a set order in which contributions and earnings must be distributed – the IRS ordering rules for distributions.1
So in other words, merely withdrawing your regular contribution will not trigger tax. But if your Roth has realized earnings from contributions, the earnings will be subject to income tax if they are withdrawn.
Is your withdrawal a qualified distribution? Here’s another important consideration. If you have owned your Roth IRA for less than 5 years and/or are younger than age 59½, you risk taking a nonqualified distribution if you withdraw money from it. You know what that means â a 10% penalty for early withdrawal in addition to taxes. (There are some exceptions to this outlined in IRS Publication 590, which is certainly worth reading.)1
If you have owned your Roth IRA for more than 5 years â¦
You can withdraw nontaxable conversions to your Roth IRA at any time.3
Watch the 5-year clock. Yes, how is the 5-year period preceding a qualified distribution measured? The clock starts on January 1st of the tax year of your initial contribution, conversion or rollover to a Roth IRA. For example, let’s say you opened up a Roth IRA account on January 1, 2007. On January 1, 2012, your Roth IRA will meet the five-year test.1
What if you have multiple Roths? Well, when it comes to distributions, the IRS has some aggregation rules for you.You will have to figure out the taxable amounts withdrawn, distributions and contributions using a little addition. You must â¦
There are additional rules for recharacterized contributions that end up in a Roth IRA.
If all this makes you want to talk to a financial advisor or accountant, before you take money out of your Roth IRA ⦠well, that is a wise step to take. Confer with the financial or tax advisor you know and trust.
This does not constitute an endorsement by John Jastremski, The Retirement Group or the author of the book. The opinions expressed are solely those of the author and may or may not be a representative opinion of The Retirement Group or John Jastremski.
These are the views of Peter Montoya Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.
Visit us on the web: http://www.theretirementgroup.comFor more information: Â http://www.theretirementgroup.com/new/retiregroup2/content.asp?contentid=2016566134
Citations.
1 irs.gov/publications/p590/ch02.html#en_US_publink10006523 [12/4/09]
2 investopedia.com/ask/answers/179.asp?viewed=1 [12/4/09]
3 smartmoney.com/personal-finance/retirement/nine-frequently-asked-questions-about-iras-7950/ [1/21/09]
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We are a group of financial professionals who focus entirely on retirement planning and the design of retirement portfolios for the corporate transitioning employee.
John Jastremski is a Representative with QA3 Financial and may be reached at The Retirement Group 800-900-5867
