little advice/ just got info on my 401k
 

I just got a packet from the compeny handling my 401k, since I no longer work for the place that it was for. I have to do something with the money. I don't know what to do. since ya'll are great about helping with guns little advice here would be great here too.;)

RE: little advice/ just got info on my 401k
 

Roll it over into an IRA.

RE: little advice/ just got info on my 401k
 

Spend it, buy more guns, think of it as an investment:D

RE: little advice/ just got info on my 401k
 

contact a financial advisor and discuss with them your long range financial goals. Often times, check with your locak bank as they have financial advisiors that work for them. Let them suggest the best way to reinvest that money in a safe manner,so that you can have some kind of nest egg in the future. Believe me, when you retire, you will be very happy you invested wisely.

RE: little advice/ just got info on my 401k
 

sell your knight and tc. and then go buy yourself a beautyful TC Hawken.:)

RE: little advice/ just got info on my 401k
 

If its enough so that tax willhurt then you might want to consider reinvesting in a retirement plan of some sort, at that point a trip to all of the local banks to see what is being offered might be indicated. Lee

RE: little advice/ just got info on my 401k
 

gee, I wounder where I can find one of those right now. if I did go to sell them, I would be making money on the knight at least. I paid $135 for both of them :D

I got over a month to decide, if I don't they will be sending me the money -20% for fed tax. I am thinking of just pulling it and putting into my personal savings until I find a job then open a ira and do a 401k thought them but I do that I be having to do the 20% fed tax and about 10% for state tax

RE: little advice/ just got info on my 401k
 

if you re invest it correctly now, you do not loose the 20% which can add up to a lot of money... but its your money, do what you want with it.

RE: little advice/ just got info on my 401k
 

Corey I went through this 2 times. Roll it over into a IRA. Get with a financil adviser an they can handle it for you. You have a certain time to do this off hand I dont remember how long but is enough to find someone. If ya cash it in you suffer a penalty and taxes off the top.

RE: little advice/ just got info on my 401k
 

Corey, without a doubt - roll it over. An IRA is certainly one way to go, probably the best. Check your community services people and see if they have any kind of financial advisory services available. You might also check local community colleges for same.

At your age, you should be investing by dollar cost averagingin a "no load" mutual fund every month. Do your "older self" a big favor and type "no load mutual funds" in your google search engine and read, read, read. The years do go by.

RE: little advice/ just got info on my 401k
 

This is some great advice I would deff. roll it over to a IRA . If you cash it you will loose big time !

Ron

RE: little advice/ just got info on my 401k
 

How old are you???

The first thing you should do is offer to pay a tax accountant $100, and take him to lunch, ask him for his advice. Do not use your accountant, or anyone related to you, you want to speak to some onewho DOES NOT HAVE a dog in the hunt.

I hate to disagree with some of the poster's above, but I do not like financial advisor's. They will ALWAYS have their best interest in mind.

I have a degree in Finance, Accounting, and Wood Science. I am also 2 semester's short of my MBA. I have been doing my own and other people's retirement accounts for years. Be very careful.

As I asked above, your age is very important here.

The second most important thing is your willingness to take a risk. And your tolerance for risk taking, and your personal tolerance for taking a loss. These factors are very important, the most important time not to pull out of a stock or fund is in a falling market.

As stated above you can roll your account over into an IRA. There are two types of IRA's. A Traditional and a Roth. The accountant you hire for an hour should be able to advise you as to which IRA is better for you.

Another question is are you fully vested in your company's contributions??? Most vestation periods are 7 years.

Someone suggested above to read, read, read, that is good advice. The more you read, the more you will understand what people are telling you. You need to talk to a few different professional's. But as stated above, you need to make sure they do not have a dog in the hunt. Tom.

RE: little advice/ just got info on my 401k
 

I am 30 and just started the 401k last year, it is not that much money. just over $2500 in it.

I spoke with my wife and we agreed with what is going on with the job market in my area. it maybe better overall to go on and take the hit, pull it out and put in the savings for a rainy day. like my unemployment runs out before I get another job.

kinda of the near over the far right now.

6 apps. out no calls and going out and putting more in and talking to the one that has been out the longest.

RE: little advice/ just got info on my 401k
 

If you take the money to savings you pay tax, to save paying the tax you must do a direct roll over to another 401 or IRA. You can get an IRA out for emergencys but you pay the tax when you doif you don't need it right away save it . If you take the money you also lost saver's tax credit for 3 years. If you put it in an IRA use 1 year so you can get it out without bank penalities.

RE: little advice/ just got info on my 401k
 

Cory If you are less than 59 1/2 yrs old and do not rollover,you will pay an early withdrawal penalty on top of the 20% federal tax. By all means talk to a financial advisor.

Charlie

RE: little advice/ just got info on my 401k
 

Roll it into a 401k right now and then pick safe investments at least for the next year or so. Do not withdraw it you'll pay the penalty in a lot of ways. Put it in a Schwab or TD ameritrade account as they offer advice others pretty much want to sell something and have higher fees.

RE: little advice/ just got info on my 401k
 

If you are only 30 years old I definitely would not spend the money. I would roll the account over to a ROTH IRA. You will have to pay the taxes to roll it into a ROTH. But there is no penalty, only the income tax. If you are not working then the income tax would not be very much. The benefit of the Roth is that you accrue income tax free for the rest of your life. Just imagine what that money would be worth in 35 years, tax free. Tom.

RE: little advice/ just got info on my 401k
 

If you have the check, isn't it too late to do a roll over? It is my understanding that you cant evertouch the money. It would have to be a trustee to trustee transfer. Better save it cause with taxes and penalties the gummint is gonna want close to 40%.

If you dont have the actual check, definately do a rollover. They are going to kill you if touch it before you are 59 1/2. Another thing, roll it into a roth ira at your age and you should come out way ahead 30 years down the road. Not tax deffered like most 401k's, so you will have to pay some taxes now. In the future the income of the ira will be TAX FREE! I wish I could figure out how to never pay taxes again on the rest of my income! Should be a great deal for you. Another benefit is that if for some reason you (really)need the money, you can get it with no penalty, because you already paid the taxes on it when you invested it. You can get back up to what you put in, just none of the income it creates until you are 59 1/2.

Dang HEAD types really fast! But he is right!

RE: little advice/ just got info on my 401k
 

Cory,
I'm not a financial expert but did work in that industry for a while and have been through what you are going through a few times. Along the way I havehad my share of hard knock lessons and still have a lot to learn.

You've gotten some good advise above. There are some basic things you need to consider in this situation. First, the most important money you invest is the first money you invest. Why, because it has the longest time frame to take advantage of compounding. At 30 years old you have at least 35 years till retirement. That $2500 if invested for 35 years at a very conservative 6% will become $19,000+, at 8% close to $37,000, at 10% around $70,000 and at 12%about $132,000. Over that amount of time in a proper investment you should be able to average somewhere in the 8 to 12 percent range based on past stock market performance for that length of term. However, just waiting 5 years can lower the results of the same $2500investmentat the12% return to about $75,000. Obviously the earlier you start to put money away the more it will grow and or the less risk you have to take to get it to grow. With this in mind I would encourage you to roll the money over to a self directed IRA with a company you trust and get some good advise from a finacial expert who is not just a salesman for some financial company.

Second, consider how much income you needat retirement. Using the rule of 72 you can figure out what your present income would be equal to when you retire, that amount may not be enough to retire on but it will illustrate the point. The rule of 72 works like this, take 72 and divide it by the average rate of inflation, the result is how many years it takes for cost to double, i.e. for an average of 3% inflation 72/3=24, so every 24 years your salary would need to double just to stay at the same level you are at now. Using the above example and a 35 years till retirement time frame, your retirement income will need to be 35/24 or 146% higher than it is now. If your making, for example, $25,000 now, you would have to have an additional $36,500, or $61,500 per yearjust to stay even. This means your early investments need to have as long a time to build as you can give them so you can build that nest egg that is needed to retire with dignity.

Another figure for investment needs at retirement is for every $1,000 dollars a month income needed you should havearound $150,000 invested at an 8% return. Based on the $61,500 ($5,125 per month)example above you would need around $769,000 invested at retirement to generate that much income if your getting an 8% return. If your getting lessreturn you would need more money invested. Again, the earlier you get started the better.

The hit you take by cashing out the 401K will be around 30%, maybe higher so I would think long and hard before choosing that option. Good luck and seek competent advise from someone highly recomended and not just a portfolio salesman.

Sorry for the long winded response.

RE: little advice/ just got info on my 401k
 

I think one of the times I had to roll mine over there were some people cashing them in and between the penalty and taxes they were paying 38%. Thats alot to lose no matter how much ya have!!

RE: little advice/ just got info on my 401k
 

A couple of good places to check out are:

https://personal.vanguard.com/us/HomepageOverview

and

https://www.fidelity.com/

RE: little advice/ just got info on my 401k
 

For some good basic finacial info for the average investor, I like a lot of the stuff this guy has to say.

http://www.daveramsey.com/

RE: little advice/ just got info on my 401k
 

ahhhhhhhhhhhhh, lol,

hummm,
dmurphy317
by that and when I get a new job and do an 401k (maybe) I would be in pretty good shape in I retire.

I just called the compeny that it is in. it is going to be with fed tax, state tax, and the fed taking so more, 34%

RE: little advice/ just got info on my 401k
 

Roll it into an IRA, the taxes will kill you along with the penalty. Not to mention that's retirement money you will never recouperate if you take it out.

RE: little advice/ just got info on my 401k
 

If you have the determination to do it, a roth ira would likely be better than a 401k, as long as you still give up to the match if you are lucky enough to get one. I havea roth(generic target retirement)set up to take a $100 out of the bank every two weeks, and still add more when I can(up to $5000 this year). So that way its kind of automatic like a 401k.

PS. I am a dumb hick farmer, not a financial advisor, sothis advice is only worth what you paid for it. I still try to keep up. I'm 30 years old too and dont think there is a snow balls chance in hell I'll ever see a social security check.

RE: little advice/ just got info on my 401k
 

I am not a financial advisor either, but I did stay at a Holiday Inn Express recently. For the love of Pete, do not take the money out. I had a small amount in a pension after taking a new job after six months of employment. I went through a local credit union and rolled it over into a traditional IRA then into a Roth. For some reason, I think I had to do it that way. Anyway, if memory serves me correctly, there are certain withdraws you can make from your Roth before 59 1/2 without penalty. Someone correct me if Iam wrong, but I think you can withdraw penalty free money for qualifying medical expenses and even for a down payment for a first time homebuyer. Also, qualifying higher education expenses for you, your spouse, or children.

RE: little advice/ just got info on my 401k
 

Found a link for Roth IRAs
http://www.rothira-advisor.com/roth.htm#1B

RE: little advice/ just got info on my 401k
 

I am going to roll it over to an ira. I am not losing all that money. anyway I got a line on 2 jobs today one makes double then the other. lesser payng job is almost 100%, I have worked for 2 of the managers that is running the place.

RE: little advice/ just got info on my 401k
 

Good choice...seriously- think about this for a second. There is some decent advice offered above. $2500 is a decent little lump of change, but do not seek the help of a financial advisor- not nessesary for your rollover. This is a hunting website- and if you drill further down, you have solicited advice on investing and 401(k)'s on a blackpowder forum and you have 3+ pages of responses...Truthfully, I am amazed at the responses. In a good way, since most of the advice has been to invest and let compounding interest take over. Warren Buffet, John Bogle and many others have advised that average individualsinvest via index mutual funds with below average expenses. Thus, go to vanguard, Troweprice or schwab.com and do a little research...If I were you, I would roll it over into an IRA at Vanguard and put 33% in S&P 500 fund, 33% in Russell 2000, and 33% in MSCI EAFA index. (66% US stocks, and 33% Foreign stocks). Let it ride for 35 years and continually add to it...you will thank yourself one day! good luck

RE: little advice/ just got info on my 401k
 

I got a job interview monday. it may just roll it over into another 401k if I get the job. this one will pay almost twice what I made at my old. it is also an union job.

plus I got to other places, all I have to do is turn in an app. and I will have a job.

RE: little advice/ just got info on my 401k
 

You have time but don't get caught . at the very least get a Roth IRA or an IRA of any sort. Once you get straightened out you can play w/ the final account. DO NOT give that money up no how to Uncle!! You are actually being taxed twice when you pull out and pay the 20%, do hot give to Uncle!

RE: little advice/ just got info on my 401k
 

Corey,
I can understand the thought of putting the money into a new employer's 401K as it keeps all your money in one place. BUT, that's like having all your eggs in one basket, not always the best thing to do. Think about this, most 401K's have anywhere from 4 or 5 investment choices to maybe a few dozen. The investment choices are generaly good but limited to what the investment firm that manages it chose. In a self directed IRA with a company like Schwab or T Rowe Price or one of the others mentioned above you have thousands of choices and can, with help, find the ones that best match your investing needs and requirements. There is no law that says you have to keep this money in a 401K, jaut that it needs to be rolled over into a qualified account to maintain the tax status of the money. Good luck with your investing and with your job hunt.