Currently have an IRA and am about to transfer it to another company. I'm told so long as it is transferred directly into another exempt account (i.e., another IRA), there will be no penalties. Pretty confident of this but might as well make sure before accidentally bypassing some step and incurring a penalty. Anything else I need to consider?
Do research on the company you are transferring the money to. Hopefully a large, well capitalized company. Be careful of small "boutique" companies. Make sure the broker handling the transaction is a Qualified Intermediary, there is a lot of room for fraud. Research the person or company you are dealing with and you should be fine.
This is not hard. You don't need a broker or any person to help you. If you want to choose investments yourself, open an IRA account at a big brokerage shop like ETrade, Schwab, or Fidelity. Transfer the account there. Since there are no tax consequences you can sell everything and move cash, very quick. Buy whatever you want at the new place - stocks, mutual funds, anything.
If you want help, go with a reputable firm. JPMorgan Chase, Citi, and BoA have advisers in most branches. They will help you invest, but for a fee of around 1.5% per year.
If you want help, go with a reputable firm. JPMorgan Chase, Citi, and BoA have advisers in most branches. They will help you invest, but for a fee of around 1.5% per year.
Institution to institution never a problem
IRA you can take a chech and use the money for sixty days before you roll it over without tax or penalty. You can do that once a year
401-k, if it's not institution to institution, t they're required to withhold 20% which makes a full rollover more difficult
IRA you can take a chech and use the money for sixty days before you roll it over without tax or penalty. You can do that once a year
401-k, if it's not institution to institution, t they're required to withhold 20% which makes a full rollover more difficult
This is is part of the reason I'm transferring. My current broker charges 1.1% and has some other fee that can be as high as 1% also. Looking at Vanguard. Looking at their list of Vanguard funds, there are a lot that charge between 0.17 and 0.40%. Seems like a no-brainer. No reason to be charged up to 2.1% when I'm just passively investing anyway.
Also, despite there not being a penalty, I found out there is a surrender charge on some of the money I've deposited. The broker is the one trying to charge this (i.e., not any type of tax penalty). Evidentially, any new money deposited is contractually obligated to stay there for X years unless you pay a surrender charge. I guess I am just going to take out as much as I can without charges and then take out more each following year when the timeline runs out.
Ok.
I think you can consider Vanguard (my advisor hates, hates them) but also take a look at Merrill Lynch. They are offer a $600 bonus for opening a new IRA (or other) account. I would look at T Rowe Price too.
Here are a few links to help:
[h=1]Money 50: Best mutual funds and ETFs[/h]
The Street:
[h=1]Top Rated Mutual Funds[/h]
I think you can consider Vanguard (my advisor hates, hates them) but also take a look at Merrill Lynch. They are offer a $600 bonus for opening a new IRA (or other) account. I would look at T Rowe Price too.
Here are a few links to help:
[h=1]Money 50: Best mutual funds and ETFs[/h]
The Street:
[h=1]Top Rated Mutual Funds[/h]
You didn't state where your assets are held now and where you are looking to transfer to.
In any event, you don't have to sell what's in your IRA unless the company you have your assets in now only sells to their own clients. You contact the new company you want to deal with tell them you want to transfer your IRA to them and they will have you fill out a form showing what you want transferred over.
As far as mutual funds are concerned, they are convenient, you don't do any of the work but you pay for someone else to manage your funds. If you have any inkling of financial knowledge, you are better off managing your own IRA. This way you invest into the companies you want to get into and can get out of them if you like.
The biggest mistake I made in investing was early on when I was younger, it was cool and hip to tell people you were into Vanguard or Magellan Funds and you had a "guy" that was your personal financial advisor. That all stopped for me when they ran my account into the ground and only cared about generating profits for the firm and themselves. I got out of that stupidity and began to manage my own 401K accounts. I not only recouped every single dollar they lost for me but have ran my IRA's sky high.
Read some of my stock posts, educate yourself and manage your funds. It's your money, why pay someone to run it for you. You can beat their averages if you pay attention and have discipline. Might I add don't be a HOG, you will get slaughtered.
In any event, you don't have to sell what's in your IRA unless the company you have your assets in now only sells to their own clients. You contact the new company you want to deal with tell them you want to transfer your IRA to them and they will have you fill out a form showing what you want transferred over.
As far as mutual funds are concerned, they are convenient, you don't do any of the work but you pay for someone else to manage your funds. If you have any inkling of financial knowledge, you are better off managing your own IRA. This way you invest into the companies you want to get into and can get out of them if you like.
The biggest mistake I made in investing was early on when I was younger, it was cool and hip to tell people you were into Vanguard or Magellan Funds and you had a "guy" that was your personal financial advisor. That all stopped for me when they ran my account into the ground and only cared about generating profits for the firm and themselves. I got out of that stupidity and began to manage my own 401K accounts. I not only recouped every single dollar they lost for me but have ran my IRA's sky high.
Read some of my stock posts, educate yourself and manage your funds. It's your money, why pay someone to run it for you. You can beat their averages if you pay attention and have discipline. Might I add don't be a HOG, you will get slaughtered.
Thanks for the input Hot Pizza. I have two questions regarding your post:
1. If I'm quite convinced that I CANNOT beat the market or don't trust myself to attempt it, wouldn't it make more sense to invest in Vanguard index funds or something similar? I know you stated it doesn't make sense to pay someone but some of the expense ratios for these funds are like 0.17%. That is tiny. I imagine if you calculated your costs per trade, it might even come close to that over the long haul from an expense standpoint. Just curious of your thoughts based on myself not really wanting to try and beat the market.
2. I'll probably show my ignorance here regarding your comments about managing your own 401k. I have a 401k that I contribute to. Haven't looked at it lately but it's my understanding that I am tied to the broker that services the 401k and my only input is what type of funds I want my money invested in. I didn't think there was any way for me to have control over my 401k (i.e., cut costs) other than picking from their list of funds?
What I was referring to is when you transfer your IRA from one firm to another. To answer your question, when you leave a company, they give you three options, 1. Let the funds stay there. 2 Transfer/Rollover 3. Cashout.
Always transfer to a brokerage firm. This way your 401K turns into an IRA and you manage your money. As for current 401K or TSP plans, the C and S funds are the ones to load into. They produce the most returns but also in a down market have the biggest drops. Over time however the market has proven over and over, you can't keep it down. The last 5-7 years have proven that and even recent dips have been 5-6% range and here we are setting new highs again this week.
The key is paying attention. You don't have to monitor the market 24 hours a day, just check on your portfolio every few hours during the market hours, read the daily news, get an idea of where the earnings may be coming in at and again just pay attention.
Hope this helps.
you do still have 60 days to roll it over
and there is no such withholding requirement for an IRA in similar circumstances
a rollover does not have to be institution to institution
This thread is getting complicated again. Keep it simple my friend.
1. Open an IRA account at Etrade. You can buy virtually any mutual fund you want for free, from any fund family (fidelity, vanguard, american, troweprice, etc)
2. Submit an account transfer to them. You can request that they liquidate everything and send cash.
3. There are no taxes to pay when transferring from IRA to IRA.
4. The "surrender" fee your broker mentioned usually refer to an Annuity investment. That's way too complicated, and fee'd to holy hell. Ask him what the fee is, and if it is small, pay it and move on before that guy milks any more money from you.
5. Once the money arrives, invest in simple mutual funds to start. The beauty of an IRA is that there are no tax consequences! If you want all equity exposure, put all the money into the S&P 500 first, then as you get more comfortable you can switch some of the money to something else. Even stocks if you're feeling frisky, but do yourself a favor and don't buy any stocks that are less than $10. Trust me. Seriously.
6. So how do I put it into the S&P 500? Use a mutual fund (rather than an ETF) since there are no commissions to buy or sell, and you can set it to automatically reinvest the dividends. If you are investing $10,000 or more, Vanguard 500 Index Fund Admiral Shares (VFIAX) is the best one, only charges 0.05% per year. If you are investing less, then Vanguard 500 Index Fund Investor Shares (VFINX) charges 0.17% and has a $3,000 minimum.
7. Don't get bogged down with much of the other nonsense in this thread.
1. Open an IRA account at Etrade. You can buy virtually any mutual fund you want for free, from any fund family (fidelity, vanguard, american, troweprice, etc)
2. Submit an account transfer to them. You can request that they liquidate everything and send cash.
3. There are no taxes to pay when transferring from IRA to IRA.
4. The "surrender" fee your broker mentioned usually refer to an Annuity investment. That's way too complicated, and fee'd to holy hell. Ask him what the fee is, and if it is small, pay it and move on before that guy milks any more money from you.
5. Once the money arrives, invest in simple mutual funds to start. The beauty of an IRA is that there are no tax consequences! If you want all equity exposure, put all the money into the S&P 500 first, then as you get more comfortable you can switch some of the money to something else. Even stocks if you're feeling frisky, but do yourself a favor and don't buy any stocks that are less than $10. Trust me. Seriously.
6. So how do I put it into the S&P 500? Use a mutual fund (rather than an ETF) since there are no commissions to buy or sell, and you can set it to automatically reinvest the dividends. If you are investing $10,000 or more, Vanguard 500 Index Fund Admiral Shares (VFIAX) is the best one, only charges 0.05% per year. If you are investing less, then Vanguard 500 Index Fund Investor Shares (VFINX) charges 0.17% and has a $3,000 minimum.
7. Don't get bogged down with much of the other nonsense in this thread.
I would avoid these bank brokers like the plague. They are commissioned sales people and will steer you towards mutual funds (proprietary) with front end sales loads. If you want help and are willing to pay for it, find a good RIA. If you want to employ the Scott Burns couch potato strategy, than vanguard is a good choice. Just be careful when choosing a fixed income fund, look at the funds duration and make sure that it is not too high (above 4).
That's why I said to only use them if he is more comfortable with someone else taking the reigns. They will charge a fee to manage the portfolio, which is totally avoidable if you know what you're doing. But if you dont have any financial knowledge, it can be worth 1% to get invested the right way.
