OT: old employer 401.k?

Dave from MN · Dec 11, 2011

I have not worked there since 2004, when I resigned. My 401K has finally recouped what had been lost through all the market disasters the last few years. I can not contribute to it. I want it out, and put some place safer, more controlled by me, rather than the the market funds. Heck, if I could take the money to buy land I would. The investment firms are biased as to what you should do, they dont want you to pull YOUR money out of THIER account. Any advice as to what a person can do, what NOT to do, or who NOT do listen too? It is at the amount I made the mindset as a "get it out"trigger. Now to actually do it.

Chris(WA) · Dec 11, 2011

Find a fund you do want to invest in. Speak to their broker and have them arrange the transfer. Much less risk and pain that way.Lots of rules etc.

bo · Dec 11, 2011

You can't get it out without a large penalty..you may be able to roll it over into an IRA. Vangard is probably the best independant, low fee company around. I use them and they are fine. Call them up (google the #)talk to financial adviser, tell him you want security and not risk. You don't want equities,you want money market and ask them when they last broke a buck. That is, in money market funds, breaking a buck means that for a buck you put in, you could lose more than a buck but because of the integrity of the company and for loyalty of the customer, they don't do it. Either way, you have to do it your way.

Tramway Guy · Dec 11, 2011

Most 401(k) funds have several different plans, which usually include a wide range or risk/return options. That said, various funds have varying fees, also.
Nothing should prevent you from rolling your money to another fund.

To me, Vanguard is one of the best.

wisbaker · Dec 11, 2011

You can roll it over into another IRA with out penaltys, you just have to find someone that you trust to work with. Various agents will sell you different instruments to hold the money in. Unfortunatly you'll be limited to something that is account based, like stock, bonds, mutual funds, precious metals or resources, CDs or money market funds. You might find someone that could invest your money in a publically traded real estate fund. If you take it out of the IRA you'll have to pay taxes and a penatly if you are to young. I am lucky in that I have two firms I would trust for that that are outside of the normal AG Edwards/Smith Barney/ING/State Farm type firm, but both of them have a prequesite before you can do business with them that you might not have.

MarkB_MI · Dec 11, 2011

Find an investment company with which you feel comfortable and whose investment options match what you want to do. I will say that both T. Rowe Price and Vanguard have solid reputations, although there are other good companies as well. Once you have decided on an investment firm and picked the funds you want to invest in, call them up and explain that you want to open an IRA and transfer your old 401k funds into it. Believe me, they will be very helpful.

There is a very specific process that must be followed when transferring from one 401k or IRA to another. Do it wrong and you'll find yourself with huge penalty. Your new investment firm will give you the straight scoop, follow their instructions to a "T".

You feel your investments are "unsafe" where they're at, but are they? Ultimately, ALL investments are "market funds", just different markets. Yes, your money is PROBABLY safe in a money market fund, but keeping it all out of the stock market will just guarantee you go broke quicker.

Anonymous-0 · Dec 11, 2011

If you want safety then transfer to fund that only with USA Treasuary securities (bonds/bills etc). Return is almost squat. If you can tolerate a little more risk and the probability of a decent return then go with an index fund.

davpal · Dec 11, 2011

He will only pay a 10% penalty if he draws it out. Then he will have to pay taxes on top of that. Unless he's over 59 1/2 years old. Then he doesn't have to pay the penalty. The amount of taxes will depend on the amount he has in there. Funny thing is he could lose 10-50% just leaving it in there another year. His choice. I know this to be fact because I just did this very same thing he's talking about and I'm 47 years old and it was with Vanguard.

paul · Dec 11, 2011

The MF Global mess has made the flaws & cheating of most investmernt companies pretty visable, tho not many are looking....

When you sign up, you are signing fine print that allows them to take your money/ asset and reassign it as collatoral for any of their corporate loans. This is not well regulated.

Then the company uses this fund to play the markets. Some only do a little, some do a lot, but they do so.

When they guess wrong with large sums of money, as MF Global did, it all falls apart and your money is gone - beause they used your 'secure' account as collatoral for their playland.

If you don't know what 'hypothecate' means, the big firms do and they are using it.....

Unless you have stocks in your name, or bonds in your name, you probably don't have anything secure.... Nor do I.

--->Paul

Wayne from Wi · Dec 11, 2011

Dave, you need to look into SELF DIRECTED precious metals IRA's. Look for holding the actual metals accounts, not Exchange Traded Funds (ETF's) or you will be no better off than you are now. Wayne

Spook · Dec 11, 2011

I'd go with Vanguard or Fidelity, roll it over into a self directed IRA. That's what I did. It has performed a lot better, since I can invest in pretty much anything in the self directed. I prefer to do my own investing, it's not rocket science.

RMinVa · Dec 11, 2011

You can roll it over in to and IRA or several IRA's at your local bank. That way no penalty or tax. I did that in 1995. Took from Feb. to Sept. the get it rolled over. I hope things are a lot faster now.

If it were me I'd make a call to Clark Howard and get some free advice.

Dave from MN · Dec 11, 2011

I am 41, have seen it reduced to 50% of what is it now. Do not like the warm fuzzy when I see YTD return so peachy looking, knowing it is just losses regained, and a 5 year return of basically 0%. I believe contributions were 50% post taxed. Now my main retirement "fund" is my farm, my assets, my land, my savings. I would rather transfer my 401K to either a safe interest accruing IRA or something, or take it out, pay remianing taxes, penalties and invest in the one thing that actually has been appreciating, more land. If interest rates take off, wouldnt the money in interest bearing accounts do better than the markets will? I just want it out, and safe from losing most of it again. It will happen before the next election, I am not waiting.

JMS/.MN · Dec 11, 2011

Personal or internet friends are not a good source for financial advice. Professionals are worth the price, and the price goes up when you get poor free advice. Recently you asked a tax question here, I was tempted to say the same then. I"ve been with Conway, Deuth, and Schmiesing, Willmar office, since 1988. They are also now in Sartell, north of the Perkins on Connecticut Ave., as well as other MN locations. They have handled some very complicated issues for me, along with the usual, and nothing has ever been questioned. They are self-described as "aggressive" in tax matters, and have the expertise to back it up. ps- regarding your used grain bin question- make sure you put at least four roof vents on them. Really nice to be able to start the fan without needing to open the bin, especially as you get older. Grain needs to breathe all year, too.

Mike (WA) · Dec 11, 2011

You can't hold the actual metals themselves in an IRA (believe me, I've tried- if somebody knows a way, please post it). The closest you can come is certificates for the metals. After age 59 1/2, you can get the metals out, but you pay ordinary income tax on the value drawn out.

I consider the certificates about a scosh better than worthless. Metals are an "Armageddon play"- a hedge against the possible collapse of the economy. If that happens, your metals will be on their way to parts unknown, in the hands of the managers of the certificate accounts. You can wave your certificates at them until the cows come home.

As for your old 401K, many others on here have it right- 10% penalty if you draw it out before 59 1/2, but you can roll it into a self directed IRA without penalty.

Gun guru · Dec 11, 2011

I still have 2 piles of money with my old employers. I have not moved the money due to not knowing where I want to put it, or invest it in.
I would like to sit down with a person with a real good track record for picking good investments and dump $20k or more with his/her firm. I bought a pile of GM bonds in 2007 and I almost lost my azz. A stockbroker guy gave me this advice, I am not pizzed at him cause I got all my money back.
When you transfer the money be sure that the check is NOT made out to you personally or you will be socked with the taxes and the 10% penalty.

Duner Wi · Dec 11, 2011

One option would be to open a Scottrade self directed IRA account. Mn has 10 stores. $7.00 in and $7.00 to sell. Make all your own decisions and execute online for the $7.00 price. Transfer directly to Scottrade, do not get funds delivered to you or penalties may apply. Scottrade will help you set it up and transfer to your account.
You can set up your self directed IRA at most any brokerage house but if you seek their investment advise you will pay for it one way or another.
Have fun!

Anonymous-0 · Dec 11, 2011

It is easy enough to roll a 401k, or for that matter a 403b or a 457, into a self directed IRA. In a Self Directed IRA you can hold property like rental houses or even rented farm land. Expect a lot of resistance from the "Investment Professional" as they will lose comissions. They will even say it can't be done. Not true, a good CPA can navigate you through the rules.

Mike (WA) · Dec 11, 2011

You can own real estate in an IRA, but its tricky. Main thing is, you can't co-mingle your personal funds with the IRA money. Ever. Or the whole thing gets thrown out, and its penalty time. IRA money has to buy it, pay property taxes and maintenance, everything. Income from the property goes back into the IRA. You have to have a separate management company involved.

Google IRA real estate. And you have to do it right, because the IRA folks fire off a 1099 to IRS every time you do something, so you can't just do what you want and hope you don't get caught. "Don't try this at home."

Larry Wallace · Dec 11, 2011

Dave,

I highly recommend that you have your 401K rolled over into a ROTH IRA. DO NOT allow anyone to send the money, (check) from the 401 directly to you, you will be taxed - big time. You want a direct transfer into your ROTH IRA. Check DaveRamsey.com and find an endorsed local provider financial planner for your area.

Larry.

Paul from MI · Dec 11, 2011

The quicker you can roll it into an IRA in your name the better. I did that with my 401 when I retired, best move I made. I can't advise on investments, I rely on professionals, but have them help you get it in your name and away from an employer 401, it's a lot cleaner and you control it all.

Spook · Dec 11, 2011

I was recently looking into real estate in my IRA. One thing, you cannot rent to yourself.

Wayne from Wi · Dec 11, 2011

Mike,,Personally, I have not transferred a 401 to a precious metals account. I have done better. These people come very highly recommended, and can probably steer you (tractor related words) to answers you are looking for. I hope YT allows posting to their website. USAGold.com Best wishes. Wayne

DoubleR · Dec 11, 2011

Do not let the money go through your hands when you withdraw it. Unless your over 59 1/2. Make sure its done properly or you will get a nice tax bill. I would consider a professional that you trust and constult with them. I moved my two IRAs but it went directly from one to the other. For what its worth.

Bill(Wis) · Dec 11, 2011

Roll it over into a self directed IRA. Vanguard or Fidelity are two of the best because they have such a wide selection of investments and their FEES are minimal. Look out for high FEE$ in many of the others. It'll eat you alive with todays returns.

Anonymous-0 · Dec 12, 2011

Oh no, never do that.

Anonymous-0 · Dec 12, 2011

Like I said, it can be done, but you better undestand the rules. However, I think, no matter what you are investing, in you better understand it.

dhermesc · Dec 12, 2011

I wouldn't mess with a ROTH IRA.

In the next couple years there is much more of a chance of them being taxed than there is of traditional IRAs being taxed twice.

Anonymous-0 · Dec 12, 2011

If you do convert a 401 k to a Roth IRA, you may owe taxes on the pre tax contributions (if any were made) you made to the 401K. Depending on the amount, the tax bill could be pretty hefty

GLB in Kansas · Dec 12, 2011

Dave- I felt the same way 12 years ago and had my self-directed traditional IRA buy an 80. A few years later I bought another 80, split between the traditional and my ROTH IRA. Land was a lot cheaper then, so it was a great investment. Don"t know if the "next" 80 will be that great of a deal. A key is finding an understanding IRA trustee that will let you buy land YOU want to buy, not some of their investments. My bank is very agriculturally based with a good trust department manager that is also a farmer. And we still had to have a lot of discussions about how to handle things. Second, forget about you or your close relative farming the land. I did cash rent written leases with good neighbors I selected. No one will care if you hunt the deer or cut brush, but you best not be planting or harvesting. You may be able to have the place custom farmed, I"ve not been willing to carry that risk. It is very tricky for the IRA to borrow money, and triggers some other tax issues. You are young now, and this won"t bother you now, but remember at 70 1/2 year old you HAVE to begin distributions from a traditional IRA. If the only asset is land, you might have to sell it. By the way, I have a lawyer friend that used to own a cowherd and a pasture in his IRA, leased the whole deal on shares to a local rancher.
If you are serious about this, get some competent legal and IRA help, preferably from someone reasonably local that has been through this before. Take the advice from far away internet people ( including me!) with a grain of salt. You really don"t want to screw up your 401k/IRA. Good Luck!

OT: old employer 401.k?

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Member

Well-known Member

Member

Well-known Member

Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Member

Well-known Member

Well-known Member

Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

New User

Similar threads