401k Options after Resignation

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Anonymous

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Just read the "annuity options" thread, and much of the sentiment is that annuities are a nightmare. Unfortunately, I experienced that with my husband's annuity years ago, and lost $300,000. We thought we were borrowing from interest "only," and not touching the principal, but were mistaken.

If I were to leave my company, I think my financial planner may recommend an annuity. Uncertain as to how quickly I have to decide after resignation, but need to make a good decision. My husband made the last one, and said he'll do the same this time, but he nor I undertood what was going on.

Fortunately, I saved what little I had prior to the market crashing years ago as I was in PIMCO, bonds, etc... I cannot chance screwing up again so will probably meet privately with my FP. Hoping no one slams me with marriage advice as I need to protect myself which in turn will protect my husband.

Although I trust our FP, there's also great advice on this board. Any thoughts or insight will be greatly appreciated!
 






Most likely not good to go with Annuity with 401K after resignation. Your FP may recommend because FP's typically make BIG money on Annuities. I would recommend rolling over into a self directed IRA where it's shielded from taxes and you can put it into anything you want (mutual funds, stocks, bonds, etc). Almost like a mini 401K.
 






Anonymous said:
Most likely not good to go with Annuity with 401K after resignation. Your FP may recommend because FP's typically make BIG money on Annuities. I would recommend rolling over into a self directed IRA where it's shielded from taxes and you can put it into anything you want (mutual funds, stocks, bonds, etc). Almost like a mini 401K.
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Perfect! Thank You!
 












OP you obviously know absolutely nothing about your money. You'd be wise to brush up on your knowledge first before you ask questions here or you ask your financial planner anything. 401Ks can remain exactly where they are, you don't have to do anything with them unless you want to. You also can roll over into an IRA.
 






Anonymous said:
OP you obviously know absolutely nothing about your money. You'd be wise to brush up on your knowledge first before you ask questions here or you ask your financial planner anything. 401Ks can remain exactly where they are, you don't have to do anything with them unless you want to. You also can roll over into an IRA.
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Yes, you can maintain your 401K with your current employer's plan.

But often, you'll end up paying higher fees that are paid by the employer for its employees. Plus their limited investment choices may not meet your needs and if the parting of your employment is not a pleasant one, you may not want to keep your money (and it is YOUR MONEY) tied up with a plan chosen by that employer.

I'd roll it over to a IRA as soon as possible; in fact, if I had other money lying around, I might go ahead and pay the income tax now and convert it to a Roth IRA.
 






Anonymous said:
Yes, you can maintain your 401K with your current employer's plan.

But often, you'll end up paying higher fees that are paid by the employer for its employees. Plus their limited investment choices may not meet your needs and if the parting of your employment is not a pleasant one, you may not want to keep your money (and it is YOUR MONEY) tied up with a plan chosen by that employer.

I'd roll it over to a IRA as soon as possible; in fact, if I had other money lying around, I might go ahead and pay the income tax now and convert it to a Roth IRA.
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Thanks for your advice! Definitely not leaving 401k with my current employer.
Meeting with financial planner is next week so it looks like an IRA is the best way to go (cannot afford the latter option).
 






Anonymous said:
Thanks for your advice! Definitely not leaving 401k with my current employer.
Meeting with financial planner is next week so it looks like an IRA is the best way to go (cannot afford the latter option).
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One thing to watch is that your planner does not fill up your funds with high cost annuities (if the suggestion of buying an annuity is mentioned, run away fast) or high cost "proprietary" mutual funds. You can get as good of funds that have a low or no load; there are some fund familites that reduce the load for larger purchases.

A 2-3% load isn't bad; watch out for the 5-10% funds. They don't do any better or worse than the low or no load funds.
 






Anonymous said:
One thing to watch is that your planner does not fill up your funds with high cost annuities (if the suggestion of buying an annuity is mentioned, run away fast) or high cost "proprietary" mutual funds. You can get as good of funds that have a low or no load; there are some fund familites that reduce the load for larger purchases.

A 2-3% load isn't bad; watch out for the 5-10% funds. They don't do any better or worse than the low or no load funds.
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2-3% is too much. You can get in any kind of fun you want at Vanguard for about .3%.

Low cost index funds do exactly the same, on average, as managed funds that you pay heavy fees for.
 






Anonymous said:
One thing to watch is that your planner does not fill up your funds with high cost annuities (if the suggestion of buying an annuity is mentioned, run away fast) or high cost "proprietary" mutual funds. You can get as good of funds that have a low or no load; there are some fund familites that reduce the load for larger purchases.

A 2-3% load isn't bad; watch out for the 5-10% funds. They don't do any better or worse than the low or no load funds.
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Much appreciated!

I realize the easiest person to sell is a salesperson so this will help a lot. Our FP is well respected so I think he'll be looking out for my best interests, but also understand he needs to make money. Thanks again!
 






Anonymous said:
One thing to watch is that your planner does not fill up your funds with high cost annuities (if the suggestion of buying an annuity is mentioned, run away fast) or high cost "proprietary" mutual funds. You can get as good of funds that have a low or no load; there are some fund familites that reduce the load for larger purchases.

A 2-3% load isn't bad; watch out for the 5-10% funds. They don't do any better or worse than the low or no load funds.
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The lady on the phone seems to think differently.

http://www.youtube.com/watch?v=rd_3nCENMT8

(hurry. Suze keeps getting this one pulled)
 






As P Ho mentioned, you don't provide enough information for anyone to provide any sound advice. As I have mentioned previously, I am no expert on annuities, but I know a little sumthin sumthin about investing in the stock market.

If you are retiring you will have a lot of things swirling around. Hopefully you have enough money stashed away to cover your living expenses and if so, just leave the money sit in the 401K until you decide what to with it. There is no rush, although those who wish to part you with your money will make it seem like there is.
 






I Love America said:
As P Ho mentioned, you don't provide enough information for anyone to provide any sound advice. As I have mentioned previously, I am no expert on annuities, but I know a little sumthin sumthin about investing in the stock market.

If you are retiring you will have a lot of things swirling around. Hopefully you have enough money stashed away to cover your living expenses and if so, just leave the money sit in the 401K until you decide what to with it. There is no rush, although those who wish to part you with your money will make it seem like there is.
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In a way there is a rush. The money can be rolled over into a Money Market IRA until a decision is made.

Why? ILA, you would not believe where people go for financial advice. Money Magazine, Infomercials, Cafepharma....
 






I Love America said:
As P Ho mentioned, you don't provide enough information for anyone to provide any sound advice. As I have mentioned previously, I am no expert on annuities, but I know a little sumthin sumthin about investing in the stock market.

If you are retiring you will have a lot of things swirling around. Hopefully you have enough money stashed away to cover your living expenses and if so, just leave the money sit in the 401K until you decide what to with it. There is no rush, although those who wish to part you with your money will make it seem like there is.
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No, you don't know about stock market investing.
 






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