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Financial Advisor? 401k Advise Needed

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Old 07-13-2011, 07:57 AM   #1
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Financial Advisor? 401k Advise Needed

For those of you knowledgeable at investing and 401ks I have a question I hope you can help me with.

I currently have a 401k with a past employer that would end up costing me approximately $50.00 a year to maintain (fees) and is currently earning about 15.8% for the year.

I also have a 401k with my present employer earning about 16.5% for the year.

I think I need to rollover, transfer, or do something with the money in my past employer's 401k. Would I be better off transferring the balance to my current employer's 401k (if possible), keep paying the fees and keep it where it is, put it in an IRA, or cash it out and buy me some "Man Toys"? Obviously I am kidding about the last option! If I put it in an IRA I think I would have to pay taxes on the amount pulled out but I am not sure on this. I am trying to learn more and more about this kind of stuff.

Any advice is greatly appreciated. By the way I am 34 years old.
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Old 07-13-2011, 08:07 AM   #2
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Best option is to roll over to present 401k plan with new employer, if you pull the money out of past employers 401k you will pay penalties and taxes. Roll it over!
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Old 07-13-2011, 09:02 PM   #3
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Quote:
Originally Posted by cc350 View Post
Best option is to roll over to present 401k plan with new employer, if you pull the money out of past employers 401k you will pay penalties and taxes. Roll it over!

^
What he said, I did that before and the 401K was basically "frozen" meaning I couldn't make any changes to it...when they lose, they lose fast...luckily I wasn't very heavily invested in that one (like $1500 or so...still it's money lost).
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Old 07-14-2011, 11:59 AM   #4
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Quote:
Originally Posted by cc350 View Post
Best option is to roll over to present 401k plan with new employer, if you pull the money out of past employers 401k you will pay penalties and taxes. Roll it over!
Not exactly...

You can take funds out of a retirement account for 60 days with no penalties or fees (unless the company has their own fees). As long as funds are replaced, or put into another qualified retirement account, within 60 days, it is not considered a distribution (taxable event).

You will have a couple options, but the biggest decision is if you want to self direct - it can go into a "rollover IRA" or Traditional IRA at your choice of brokerage firms. Or, you can do a Roth Conversion if that works with your personal finances - talk to a professional you trust -

OR

You can simply roll it into another employers 401k plan for the plan administrator to work with (or choose your investments from their list) . You will want to talk to both the previous companies and current companies 401k plan administrator to ensure everything is copacetic, and make sure you follow procedures and paperwork for both companies, but this is a fairly common move, and neither option should be an issue in any way.
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Old 07-16-2011, 11:26 AM   #5
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Quote:
Originally Posted by mattg43 View Post
Not exactly...

You can take funds out of a retirement account for 60 days with no penalties or fees (unless the company has their own fees). As long as funds are replaced, or put into another qualified retirement account, within 60 days, it is not considered a distribution (taxable event).

You will have a couple options, but the biggest decision is if you want to self direct - it can go into a "rollover IRA" or Traditional IRA at your choice of brokerage firms. Or, you can do a Roth Conversion if that works with your personal finances - talk to a professional you trust -

OR

You can simply roll it into another employers 401k plan for the plan administrator to work with (or choose your investments from their list) . You will want to talk to both the previous companies and current companies 401k plan administrator to ensure everything is copacetic, and make sure you follow procedures and paperwork for both companies, but this is a fairly common move, and neither option should be an issue in any way.

So I could take the money out and put it in an IRA and not pay a penelty or taxes as long as I do it within 60 day's?
I still can't decide what to do. I guess I had better talk to someone who can help me out.
Thanks everyone for your input.
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Old 07-17-2011, 10:23 AM   #6
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Quote:
Originally Posted by sdnicker2000 View Post
So I could take the money out and put it in an IRA and not pay a penelty or taxes as long as I do it within 60 day's?
I still can't decide what to do. I guess I had better talk to someone who can help me out.
Thanks everyone for your input.
Correct, with one exception. If the 401k is pre-tax (most are, you would have to select otherwise) you will need to put it into a rollover or traditional IRA (handled the same, except the Rollover is used if you are planning on moving funds into another managed 401k account in the future).

If you intend to convert it to a Roth IRA you will pay taxes at the time of the conversion or the next tax filing deadline (Same tax year the conversion is done), but it is your choice.
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Old 08-14-2011, 06:59 AM   #7
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Dude, if you are earning 12-16% PRR on your 401k, I'd toss as much in there as you possibly can.
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Old 08-18-2011, 12:15 AM   #8
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Last I checked, you can go to Vanguard for no fees with $50K+, if that's what you're talking about. Your rate of return is pretty high, sure you're figuring right? You in some high risk stuff for that?

https://personal.vanguard.com/us/whatweoffer/rollover
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Old 08-18-2011, 06:50 PM   #9
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According to the account info as of today the current 1-Year PRR is 19.3%

The 3 and 5 Year return are both 3.5%.

So is the 3 and 5 year PRR sound like a more realistic return and to be used when figuring/compariing PRR's.
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Old 08-18-2011, 06:59 PM   #10
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Quote:
Originally Posted by PR45 View Post
Last I checked, you can go to Vanguard for no fees with $50K+, if that's what you're talking about. Your rate of return is pretty high, sure you're figuring right? You in some high risk stuff for that?

https://personal.vanguard.com/us/whatweoffer/rollover
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Old 08-18-2011, 08:58 PM   #11
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Quote:
Originally Posted by sdnicker2000 View Post
According to the account info as of today the current 1-Year PRR is 19.3%

The 3 and 5 Year return are both 3.5%.

So is the 3 and 5 year PRR sound like a more realistic return and to be used when figuring/compariing PRR's.
Well, up until last week, this year had a pretty good run. Right now your return for the year is probably -0-.

These things are long term, so you can't try to move your funds around, or guess the market etc, and you certainly don't want to get out of long term investment. As tough as it is, what is the alternative? If you have enough money to buy real estate, you would still want some kind of stock or bond investment.

Anyway, I think Vanguard is a good option. They have very low costs and aren't calling you to "churn" your account so they can collect fees.

Keep researching until you are comfortable.
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Old 08-18-2011, 09:47 PM   #12
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last year I rolled a regular IRA over to my roth IRA. have to pay the tax on the reg.IRA. fed.tax can be spread over 2 yrs. state tax (PA) must be paid this yr.only.the broker took it out before the transfer was made. as far as I know rollovers are not taxable,unless rolled over into a roth IRA. there usually is a termination fee involved when you close one out,or transfer the account. usually not that much,but that can vary. in my opinion,the roth IRA is the way to go. mine is self directed. you may not have the option and have to stick with company 401K plans. sounds like you'r in two pretty good ones,but that can change quick!
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Old 08-19-2011, 09:16 AM   #13
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Thank you everyone for your comments and suggestions. I am going to investigate all my options again and see what I decide. My wife has her money in an IRA. Not sure if it is a Roth or not but I think I will call the guy in charge of it and see what he recommends. He is a local guy so hopefully he will be honest and not just try to lure me in to make some quick money.
Thanks again.
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Old 08-23-2011, 07:32 PM   #14
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Glad i found this thread.

So i just got laid off and need money bad till I get another job and I do have my 401k set up at the job I got laid off from.

Says i have about $X,XXX. I know that if i decide to take the money that I lose 20% of it to Federal Taxes and the I decide X amount to go to State Taxes. My question is i know theres a penalty when it comes to taxes at the end of the year but im wondering if anyone knows how big of a penalty it'll be.
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Old 12-15-2011, 12:42 PM   #15
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Quote:
Originally Posted by VanillaGorilla View Post
Glad i found this thread.

So i just got laid off and need money bad till I get another job and I do have my 401k set up at the job I got laid off from.

Says i have about $X,XXX. I know that if i decide to take the money that I lose 20% of it to Federal Taxes and the I decide X amount to go to State Taxes. My question is i know theres a penalty when it comes to taxes at the end of the year but im wondering if anyone knows how big of a penalty it'll be.
You may be able to make a hardship withdrawl. This should reduce the tax penalty.
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Old 12-15-2011, 12:44 PM   #16
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Quote:
Originally Posted by sdnicker2000 View Post
For those of you knowledgeable at investing and 401ks I have a question I hope you can help me with.

I currently have a 401k with a past employer that would end up costing me approximately $50.00 a year to maintain (fees) and is currently earning about 15.8% for the year.

I also have a 401k with my present employer earning about 16.5% for the year.

I think I need to rollover, transfer, or do something with the money in my past employer's 401k. Would I be better off transferring the balance to my current employer's 401k (if possible), keep paying the fees and keep it where it is, put it in an IRA, or cash it out and buy me some "Man Toys"? Obviously I am kidding about the last option! If I put it in an IRA I think I would have to pay taxes on the amount pulled out but I am not sure on this. I am trying to learn more and more about this kind of stuff.

Any advice is greatly appreciated. By the way I am 34 years old.
Did you end up making any changes? Just curious which route you went. You have lots of choices with your money that are penalty free. You can create a new IRA account and transfer the funds there.
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Old 12-15-2011, 12:50 PM   #17
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Roll it over into the new employers plan. There should be no fee associated with doing that.
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