Hi Joseph, try contacting the plan administrator ( ex. Fidelity, Vanguard etc.) to start rolling over your defined contribution plan. The only reason I can think of for this delay with your employer could be that they haven't yet finalized their profit sharing contribution for 2013
Hi billie. I'm afraid I'm not familiar with either of those companies but I have clients who like to play the market with individual companies and I tell them it is okay as long as it is with money that they can afford to lose. You said you don't need the money but your cost basis and how you feel about holding on to those stocks should guide you in making your decision.
Hi Connie -- Your questions today were fielded by advisers Brent Perry, Bobbie Munroe and George Middleton.
Hassan: You can use a total bond index, but first look at it's holdings. Often holdings cover government, mortgage, international, corporate bonds, high yield and others. If you don't feel the bond index covers different type bonds then you could look into individual funds that cover the areas mentioned. You could also have an advisor help you create a bond ladder that matures over many years.
Hassan, the 20% stocks and 80% bonds at age 80 is a rule of thumb which may or may not apply to your situation. The total bond index is a viable option, but as you indicated, it is a good idea to diversify even further with other asset classes such as emerging market debt.
Thank you to everyone who has submitted questions so far today! We're answering them in the order in which they are received, so if you don't see yours right away, don't fret. We will be getting to them as soon as we can. All answers will also be available in the chat transcript later.
Jason, I really don't know what todo about those loans, but talk to the college?
Hi Philly, the managed account provider, who works in partnership with your 401(k) should be able to provide this information and compare your performance to benchmarks. And this information could already be there on your 401k statement.
You can always look up the returns on target retirement funds by visiting the fund company's website.
Hi Tom. The usual withdrawal order is savings, taxable stocks and bonds, retirement funds (don't forget those reqiured distributions at 70 1/2) and pulling up the rear is tax deferred and tax free. Having said all of that, it really depends on your situation. If you are in a year when you are in a high tax brackett and need supplemental income, tax free might be the way to go. Other times you may need to make a special purchase like a vacation or a vehicle. Tax free can pay for those items without increasing your tax liability.
Dennis: The amount held in international funds will vary depending on your allocation and advisors vary on the % to hold. Generally between 9 and 25% stock funds. It used to be that the US and International markets were not as correlated but over the last few years they very much follow each other. That said holding international funds does still diversify your portfolio.
Chris, Walt has actually signed off for the day. We will see if any of the other advisers can respond!
KG, if you can't do the roth, open a traditional IRA and put in non-deductible contributions, doesn't matter what you income is. Later, you may consider converting that money in the trad IRA to the ROth
Jason B. I can't speak on the need for an original ink signature or e-signature. The bigger question is whether you received these loans or not. You'll need to dig through your records to determine which loans were paid for your school expenses. Then, dig deeper into the loans that you can't determine where they came from. Another clue could come from your credit report which will show dates of the loans. You are entitled to a free copy of your credit report each year from www.annualcreditreport.com.
HI KG, for 2014, the maximum you can contribute to all of your traditional and Roth IRAs is the smaller of $5,500 ($6,500 if you’re age 50 or older), or your taxable compensation for the year.
So if you have maxed out your 401(k)s and IRA options, you may have to save in a taxable brokerage account unless your company provides a non-qualified deferred compensation plan.
Dennis, countries outside the US are capturing a larger percentage of world GDP each year. How much to put into them depends on your specific circumstances, but it is a good idea. Remember, however, that the companies in the S&P 500 do a tremendous amount of business worldwide so that alone provides international exposure. I would sit down with a financial advisor to determine the asset allocation that is right for you.
DJ, don't fall for that whole life investment trick. Life ins is for those who have dependents. Maximize your 401k, When you have a wife of kids consider a 30 yr term policy.
Simon -- Will you give that a try? I might have gotten cut off. Thanks!
Hi Carlos, you are on the right track with retirement with $112k saved in your 401(k) and $28k in ROTH. Keep up with the savings and work with a financial advisor to make sure that your savings are invested wisely
DJ. As a 24 year old, don't bother with whole life insurance. Focus on getting the maximum employer match in your 401(k). If your 401(k) offers a Roth 401(k) option, consider that assuming you are in a lower tax bracket. Beyond the employer match in a 401(k), open and fund a Roth IRA. Both the Roth IRA and Roth 401(k) grow tax free for retirement. A life insurance policy grows tax deferred and may have some tax free benefits, but the fees and insurance expenses will eat into your returns. When you need life insurance to provide for a spouse or kids, purchase a 20-30 year term policy.
Carlos, you're not giving us the whole picture. Other considerations include how much are you spending (or will spend), your expected retirement age, how much you plan to add to retirement in future years. A financial advisor could help you with it or you could try the retirement calculator featured at Kiplinger's.
Jason, so you do owe the money but are concerned about the interest rate. Have you checked to see if you can refinance these loans?
Hi Chris. I found your original question to Walt. Yes a personal account is like something you would set up with a discout broker like TD Ameritrade. You can buy stocks bonds and just about anything else but I suggest you stick to well diversified mutual funds like the KIP 25. As for cap gain rates, short term rates on securities held for less than a year are the same as your ordinary income tax rates. Long term rates on securities held for more than a year are taxed at 15% for somebody in your brackett.
Laurie, the fund I mentioned can be liquidated just about any time, but your time horizon is important here. If you can handle the volatility and you have 5 yrs or more
Jason B. It sounds like the loans were used for your education, so you owe the money. Check on what type of loans you have (Stafford, etc.) and refinance to a lower interest rate.
Morning! I retired end of 2012 at age 55, and left my 401K alone with my previous employer & administrator. Today, my 401K is over $800K. Conventional media (Kiplinger, Money, etc.) and most financial planners say immediately roll a 401K from prev employer into an IRA. But why??? I am considering rolling the two index funds in my 401K over to IRAs at Vanguard with equivalent index funds. But, the fees at Vanguard are actually slightly higher than in my 401K. For this reason, and the flexibility to withdraw funds without tax consequence prior to 59 1/2 (since I'm retired), I believe my better option is to leave my 401K alone. Second opinion please? Any advantage to rolling 401K into an IRA at this time (other than commissions to a new advisor)??
Hi billie. I'm afraid I'm not familiar with either of those companies but I have clients who like to play the market with individual companies and I tell them it is okay as long as it is with money that they can afford to lose. You said you don't need the money but your cost basis and how you feel about holding on to those stocks should guide you in making your decision.
Hi Sky, if you do decide to invest in some Kiplinger 25 funds (which are our favorite no-load mutual funds), here are some model portfolios for you to consider.
RR, you can always withdraw contributed money (not the earnings on it) out tax free and penalty free with no waiting period. But the rules are very different for amount that are CONVERTED rather than contributed to a ROTH. There is a great (and brief) tutorial on this topic atIt will give you good examples of how any tax and/or penalty on ROTH withdrawals is calculated. Kiplinger, I'm sure you have an excellent article on this topic.
Jason B. I can't speak on the need for an original ink signature or e-signature. The bigger question is whether you received these loans or not. You'll need to dig through your records to determine which loans were paid for your school expenses. Then, dig deeper into the loans that you can't determine where they came from. Another clue could come from your credit report which will show dates of the loans. You are entitled to a free copy of your credit report each year from www.annualcreditreport.com.
I am putting together a pretty risky portfolio as I have 25 years to work with and I am fine with the ups and downs. It is a 403b through work, using all Fidelity funds.
