OT: 401K to IRA advice

[RTLH]

My company got sold.
The 401K administrator has changes also.
I can take my 401K and role it over to the new adminisrator. May have to change some investment choices as they may not offer the same ones.
Or
I can go to my financial adviser who handles my IRA from previous employers and let him invest them for me. He does have access to the same funds where I have them invested now

 

[Art]

My company got sold.
The 401K administrator has changes also.
I can take my 401K and role it over to the new adminisrator. May have to change some investment choices as they may not offer the same ones.
Or
I can go to my financial adviser who handles my IRA from previous employers and let him invest them for me. He does have access to the same funds where I have them invested now

You pay someone to invest your money? You can stop right there.

 

[RTLH]

You pay someone to invest your money? You can stop right there.

I do not pay him.

 

[mrtailgate]

My company got sold.
The 401K administrator has changes also.
I can take my 401K and role it over to the new adminisrator. May have to change some investment choices as they may not offer the same ones.
Or
I can go to my financial adviser who handles my IRA from previous employers and let him invest them for me. He does have access to the same funds where I have them invested now

The big advantage might be with re: to the fees. Check this carefully and make sure you understand the difference between expense ratios in the funds and actual fees to admin the account. Make sure that holding the funds with your company results in no admin fees. I always question the idea of lesser choices. Most funds in similar spaces all invest in a lot of the same securities. Now if you're saying that your company has no choices for say intl investing, that is different obviously from having a choice of x mid cap or large cap funds from different houses. I would get the prospectus for the various choices that might interest you to see who they invest in. Personally, I'm not sure x mid cap versus y mid cap are materially different as to who they both invest in.

 

[sluggo72]

My company got sold.
The 401K administrator has changes also.
I can take my 401K and role it over to the new adminisrator. May have to change some investment choices as they may not offer the same ones.
Or
I can go to my financial adviser who handles my IRA from previous employers and let him invest them for me. He does have access to the same funds where I have them invested now

The big advantage to an IRA is , there are more probably more investment options available then what is offered via the 401k, including individual bonds, stocks, CDs annuities etc. most likely many more options. And if u need help call Art

 

[Ct. Lion]

Per Sluggo above, you have more flexibility with a self-directed IRA so I would roll the 401k over to an IRA at your financial firm. Then I would sign up for a new 401k at your new firm and continue to save that way too. Having multiple avenues to save for the future is always good for a lot of reasons.

 

[Cincinnati Kid]

My company got sold.
The 401K administrator has changes also.
I can take my 401K and role it over to the new adminisrator. May have to change some investment choices as they may not offer the same ones.
Or
I can go to my financial adviser who handles my IRA from previous employers and let him invest them for me. He does have access to the same funds where I have them invested now

Everybody's situation is somewhat different. Over 10 years ago, I used to manage my own investments through Vanguard plus I had my 401k plan. I started to feel uncomfortable because of inadequate diversification and basically not having a great understanding of investment choices.

I decided to go to a financial planner and im extremely pleased with my decision. Yes, I do pay a flat fee; however, my returns far exceed what my 401k plan returns have been for over a decade now. It's about double the return. It does not mean this will continue but there are just so many more choices. In fact, I'm going transfer about 80% of my 401k over to the FP in a few months.

I think it's good to have a couple of different investment companies. I'm 59 and can retire now but will work for a few more years.

Good luck with your decision.

 

[lein]

You pay someone to invest your money? You can stop right there.

They get paid regardless if you pay them directly for a service, or they sell you goods and collect a commission on the sales.

 

[tboyer]

My company got sold.
The 401K administrator has changes also.
I can take my 401K and role it over to the new adminisrator. May have to change some investment choices as they may not offer the same ones.
Or
I can go to my financial adviser who handles my IRA from previous employers and let him invest them for me. He does have access to the same funds where I have them invested now

In general, company 401k expenses are high and it is almost always in your interest to get your money out of a company 401k at the first opportunity. (American companies typically put their 401ks with crappy plans because they get a kickback).

Best choice is, without a doubt, the lowest-cost financial services company you can find. Typically it will be low cost index funds (increasingly ETFs which can be even cheaper than index funds) Assuming you have a ways till retirement, fund expenses are one of the biggest factors, if not the biggest, in the eventual return on your money. It can be worth it to keep all your money in one place because you'll get even lower expenses (kind of a volume discount)

Vanguard is an obvious choice and the pioneer in low expense investing, but if you shop around some of the other mutual fund companies -- to compete with Vanguard -- have very low expense funds and IRAs. Just read the fine print.

Be VERY careful following the investment advice of any financial professional ESPECIALLY anyone whose livelihood depends on commissions.

The only financial planner worth dealing with is the one who charges you up front by the HOUR (or by fixed fee) for advice. Any financial planner who "works with" a financial services company -- run, run, as fast as you can, in the opposite direction.

 

[Obliviax]

I don't know but make sure you are aware of any matching funds or discounted stock options for the new (assuming, larger) company.

 

[Safety Blitz]

Be VERY careful following the investment advice of any financial professional ESPECIALLY anyone whose livelihood depends on commissions.

BINGO !!!
This is so, so true. I've seen way too many sleazy "financial planners" who simply churn and churn and churn accounts to produce commissions with very little regard to the client's needs or bottom line. Their pay is not based on the performance of your account, but rather the number of "buys" and "sells" they can generate within your account.

 

[tboyer]

BINGO !!!
This is so, so true. I've seen way too many sleazy "financial planners" who simply churn and churn and churn accounts to produce commissions with very little regard to the client's needs or bottom line. Their pay is not based on the performance of your account, but rather the number of "buys" and "sells" they can generate within your account.

Yeah having your money with such a place is one of the biggest financial mistakes people can make. Over 40 years, inflated expenses and commissions can cost you literally millions of dollars, but people have no idea because the money is taken from them a little bit every year and they never calculate the impact on their retirement nest egg.

Also, beware, thanks to the new administration in Washington, the fiduciary rule for financial services companies is going to be abolished. So once again, the fiduciary duty of employees of financial services will be to their STOCKHOLDERS at the expense of investors. In other words, those people offering advice on behalf of most financial services companies are NOT on your side. Once the federal rule is reversed, their DUTY will be to screw you to maximize their company's profits.

Another reason to just move your money to Vanguard where there are no stockholders, only investors.

 

[bdgan]

Yeah having your money with such a place is one of the biggest financial mistakes people can make. Over 40 years, inflated expenses and commissions can cost you literally millions of dollars, but people have no idea because the money is taken from them a little bit every year and they never calculate the impact on their retirement nest egg.

Also, beware, thanks to the new administration in Washington, the fiduciary rule for financial services companies is going to be abolished. So once again, the fiduciary duty of employees of financial services will be to their STOCKHOLDERS at the expense of investors. In other words, those people offering advice on behalf of most financial services companies are NOT on your side. Once the federal rule is reversed, their DUTY will be to screw you to maximize their company's profits.

Another reason to just move your money to Vanguard where there are no stockholders, only investors.

1. Completely agree with your first paragraph.
2. I think your second paragraph is incorrect. The implementation of the fiduciary rule was merely delayed.
3. In fact, Vanguard was one of the firms requesting a delay.

http://www.investopedia.com/updates/dol-fiduciary-rule/

 

[BobPSU92]

I know that lubert is influential, but don't give him your retirement money.

 

[GregInPitt]

Another advantage of an IRA is that if you have years where it makes sense to convert traditional IRA money into a Roth, that is an option. Can't roll directly from a 401K into a Roth IRA.

When I left my last company I did leave money in their 401K, as it was with fidelity and I wanted a portion of my investments in the funds offered. And I also had access to a fund not offered to the general public by Fidelity. But going forward I will be converting some of these assets to IRA money and then converting to Roth - in years where my tax situation make it attractive....

Vanguard = Low Fees. And if you have a significant portfolio Vanguard will give you advice, help you manage your portfolio, for free.

 

[Eurotrash1]

Look into American Funds. The guy who advised me has consistently beat the market by a good margin.

 

[indynittany]

Per Sluggo above, you have more flexibility with a self-directed IRA so I would roll the 401k over to an IRA at your financial firm. Then I would sign up for a new 401k at your new firm and continue to save that way too. Having multiple avenues to save for the future is always good for a lot of reasons.

Usually the best course. The only tangible drawback is that your 401(k) might allow you to borrow from your account under certain circumstances. That is prohibited in IRA's.

 

[indynittany]

Yeah having your money with such a place is one of the biggest financial mistakes people can make. Over 40 years, inflated expenses and commissions can cost you literally millions of dollars, but people have no idea because the money is taken from them a little bit every year and they never calculate the impact on their retirement nest egg.

Also, beware, thanks to the new administration in Washington, the fiduciary rule for financial services companies is going to be abolished. So once again, the fiduciary duty of employees of financial services will be to their STOCKHOLDERS at the expense of investors. In other words, those people offering advice on behalf of most financial services companies are NOT on your side. Once the federal rule is reversed, their DUTY will be to screw you to maximize their company's profits.

Another reason to just move your money to Vanguard where there are no stockholders, only investors.

That's total BS! Most advisers are independent contractors. Their duty is to their clients. Not saying abuses don't occur, but you're painting with way too broad a brush.

 

[bdgan]

That's total BS! Most advisers are independent contractors. Their duty is to their clients. Not saying abuses don't occur, but you're painting with way too broad a brush.

A few thoughts:

• Look at how your adviser is paid. If he gets a commission based on what he sells his advice is not "independent".
• Look at what your adviser is authorized to sell. Is he selling funds and ETF's with ultra low expense ratios and no sales charges? Would he suggest setting up a treasury direct account? Would he advise you to put money into your 401-K instead of with him? If not I would think twice.
• Nobody cares more about your money than you do. Everyone can't be a financial expert but it's foolish to simply hand over your money and trust somebody else. Educate yourself.