Retirement Investments

[Fresh Tendrils]

At my previous job, I had enrolled in a 401k. Recently I received notification that because the amount didn't meet the threshold that two things could happen:

1) Funds distributed to me (do not want)
2) Roll-over into an IRA.

I know that I'm going to roll it over into an IRA and if I can't roll it over into Roth directly, I guess I'll just have to open a trad. IRA and then convert that to a roth.

My main question is, where do you guys invest at? I was thinking of mutual funds/bonds and had Fidelity in mind after reading a couple "best of" lists.

Also, if I want to invest in the stock market long term with specific stocks, is it better to do that myself (ie: E*trade, etc) or simply go for a mutual fund that has the specific stocks I want? Or both?

[Trevytrev11]

Re: Retirement Investments

Not sure if this pertains to you, but if you have a new company that also has a 401K you should be able to roll it over.

I would weigh your goals of investing with the reviews and pricing structure of the companies you are looking at. If you are going to be a high volume day trader or a low volume, long term investor you will want a company that meets your investing philosophies.

For the most part they are all competitive and offer different benefits depending on what you want to do.

I have had an online savings account with ing.com for years and signed up with sharebuilder quite some time ago because of a promotion they were running. They were unique in the fact that you could buy partial shares of certain stocks (you could own like $100 of Berkshire - B instead of paying $10,000 for it). I believe they still do it, but I never tried it.

Their fee's are reasonable and there are no penalties for inactivity, etc. They offer access to a ton of mutual funds as well. I think their structure is built more for the long term investor compared to others, but it has been quite some time since I did any sort of comparrison

[mjb2124]

Re: Retirement Investments

Dodge & Cox for my Roth IRA's. I have 3 with them currently (balanced fund, stock fund and international stock fund). I also have used Vanguard for a Money Market, but don't know how good they are with IRA's. I think Fidelity would be a good choice.

FWIW, be very careful rolling a 401k from one company into another companies 401k. I could be wrong, but if you do that and the company you rolled your 401k into goes bankrupt, you aren't going to see that money (isn't this what happened to many of the Enron employee's?). I thought I read that at one point in time...this is why I've rolled all of my 401K's into Roth IRA's or Traditional IRA's and then moved to a Roth later - I believe you couldn't roll a 401K directly to a Roth a number of years ago, but you can now.

[ImTellinTim]

Re: Retirement Investments

FWIW, be very careful rolling a 401k from one company into another companies 401k. I could be wrong, but if you do that and the company you rolled your 401k into goes bankrupt, you aren't going to see that money (isn't this what happened to many of the Enron employee's?). I thought I read that at one point in time...this is why I've rolled all of my 401K's into Roth IRA's or Traditional IRA's and then moved to a Roth later - I believe you couldn't roll a 401K directly to a Roth a number of years ago, but you can now.

No. Your 401K is generally held in an outside company. Fidelity for example. The problem with Enron - many took Enron stock options as their retirement plan. When the stock plumetted to $0, so did their investment.

FT. If your new company has a 401K plan, roll it into that. If not, roll it into a Roth. Either way, get it done before the deadline or you'll be paying taxes plus a 10% penalty if the funds are distibuted to you and you keep them.

[mjb2124]

Re: Retirement Investments

No. Your 401K is generally held in an outside company. Fidelity for example. The problem with Enron - many took Enron stock options as their retirement plan. When the stock plumetted to $0, so did their investment.

FT. If your new company has a 401K plan, roll it into that. If not, roll it into a Roth. Either way, get it done before the deadline or you'll be paying taxes plus a 10% penalty if the funds are distibuted to you and you keep them.

Ahhh, thanks. I didn't realize the Enron situation revolved around stock options. I don't feel as badly for those employee's as that wasn't a solid retirement plan.

I suppose a positive to rolling it straight into a Roth IRA is that you'll have more choices than a company's 401K. I'm getting a bit tired of most companies I've worked for forcing me into plans (ie: 2045 or 2055 plan which signals approximately when I'll retire without being able to choose the individual funds). I'd prefer to have more control and be able to choose the individual funds.

[Complex]

Re: Retirement Investments

Ameritrade (formerly American Express Advisors) I have had my advisor for over 10 years and I have seen a steady increase in returns each year. Even with the economy was tanking, over the year I saw gains. He talks to me and explains everything, even when I was looking at job offers he talked to me about the job offer. I consider him part of my family and my future.

[ImTellinTim]

Re: Retirement Investments

Ahhh, thanks. I didn't realize the Enron situation revolved around stock options. I don't feel as badly for those employee's as that wasn't a solid retirement plan.

I suppose a positive to rolling it straight into a Roth IRA is that you'll have more choices than a company's 401K. I'm getting a bit tired of most companies I've worked for forcing me into plans (ie: 2045 or 2055 plan which signals approximately when I'll retire without being able to choose the individual funds). I'd prefer to have more control and be able to choose the individual funds.

At my old job, they tried to encourage those kinds of funds because that's where they could charge the fees. Ultimately, it's your decision - they can't force you into how you can invest your money.

Now I'm in a job that has a pension plan.

[dickey1331]

Re: Retirement Investments

I have a Roth IRA with ING. I use the one thats more of a "savings account" since I dont like using the stock market.

[mjb2124]

Re: Retirement Investments

At my old job, they tried to encourage those kinds of funds because that's where they could charge the fees. Ultimately, it's your decision - they can't force you into how you can invest your money.

Now I'm in a job that has a pension plan.

It is our decision in the end, but when the company is matching 100% of what I put in up to 8%, it's impossible to pass it up. It's free money. I could opt out of the 401K and take that money to invest elsewhere, but I doubt it would do as good.

I'd love to see a pension... Can't beat that.

[TheShizNo1]

Re: Retirement Investments

Ok, I'm 24 and obviously nowhere close to retirement. But I'd like to understand all of this 401k and IRA jibberish to prepare me ASAP. Anyone have any sites that break this down in easy to understand terms?

[ImTellinTim]

Re: Retirement Investments

It is our decision in the end, but when the company is matching 100% of what I put in up to 8%, it's impossible to pass it up. It's free money. I could opt out of the 401K and take that money to invest elsewhere, but I doubt it would do as good.

I'd love to see a pension... Can't beat that.

I don't mean to opt out of the 401K. Do you not have different funds to choose from within the plan? I'm just going off of my experience where I had quite a variety of mutual funds and could choose what percent of the contributions went to the ones that I chose.

[mjb2124]

Re: Retirement Investments

I don't mean to opt out of the 401K. Do you not have different funds to choose from within the plan? I'm just going off of my experience where I had quite a variety of mutual funds and could choose what percent of the contributions went to the ones that I chose.

There are different levels with funds inside of the levels. Example: 2035 is one level, 2045 is another, 2055 is another etc... Each pertains to retirement year and as the number is higher, it's more aggressive. So I'm in 2055 as I want to be as aggressive as possible, but am stuck with the 5-6 funds inside of that plan...I can't change them. I can change the allocation amount for each fund though.

I've worked for other companies in the past that gave a list of 20-30 funds and said go at it. That's what I prefer...

[p_rushing]

Re: Retirement Investments

I've worked for other companies in the past that gave a list of 20-30 funds and said go at it. That's what I prefer...

That's what I have available. In the last year or 2 we got the retirement year plans also though, so I switched to those so I didn't have to manage anything myself. Fidelity handles what those plans have in them and buy/sell when needed to make money. Those plans have been doing better than the other options.

I put the max matching % and then use other options for the rest I want to save/invest.

[Fresh Tendrils]

Re: Retirement Investments

Ok, I'm 24 and obviously nowhere close to retirement. But I'd like to understand all of this 401k and IRA jibberish to prepare me ASAP. Anyone have any sites that break this down in easy to understand terms?

401(k) is an employer sponsored retirement savings account. The specifics are different per employer, but the common traits among them is the employer will match your contributions (up to a certain percent of your pay) and some even offer profit-sharing. Contributions to 401(k) come out of your pay-check before taxes are taken out; however, taxes are paid when you withdraw and there are early withdraw penalties/fees if you withdraw before a certain age unless its for a list of excused "transactions/emergencies".

On the other hand, IRA's are individual retirement accounts that you open yourself and, therefore, don't enjoy the benefits of an employer-sponsored 401(k). IRA's still provide tax benefits to the investor and there are two basic types: Traditional IRA's and Roth IRA's. They are taxed differently, but I found the future tax benefits of the Roth to outweigh the current tax benefits of the trad. IRA.


I've only been looking at this stuff the past week or two, so if somebody wants to correct any misinformation or expand on my post go ahead, but this is my general understanding of it.


Anyway...I opened a Roll Over IRA with Fidelity, but I have to wait until Monday to call Wells Fargo and have my 401(k) rolled over. Then I can turn the IRA into a Roth and voila - done.

Outside of IRAs/401ks, what else do you guys invest in? Do you guys trade stocks as well as having stocks/funds in your IRAs or what?

[WTF]

Re: Retirement Investments

Wow mjb, all they have are the Target Retirement Accounts? That stinks.