captain crunch
Tennessee
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I will be retiring at the end of June . I would like some advice on what to do with my 401k plan .I am 58 years old ,and this will be an early retirement. The company handling my 401k wants to put it in a Variable Annuity. I will have to invest it for four years. Are Variable Annities a good investment ?
Thanks
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Dick_B
Palos Heights, IL USA
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Annuities tend to have large maintenance costs. You might try putting it into a Stock Market Index Fund.
If you have a lot of money you might hire a financial advisor. You could also get Charles Schwab's book `You're 50 now what?'.
We have an advisor recommended by Schwab and they took the burden off me and are doing a fine job. Cost is 1% of the total per year. If the total increases we both win. If it decreases it costs me less.
Dick_B
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shadoow
South Texas
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these forums are probably not the best source of info for you. This is a significant decision that will affect your financial situation for many years. Find a reputable financial planner & discuss your situation with him/her. There are multiple sources on the net to find a financial planner, but one of the best sources is to ask your friends/family to see if they have a recommendation. Oftentimes, personal experiences is the best. No matter where you get a name from, check them out to see what their qualifications/certifications are. Good luck.
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Rollincool
Always Rollin
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Hey captain, see this page on variable annuities.
401k is a growth-oriented retirement plan but lack of knowledge about managing it, especially after retirement, can lead to losses. However, managing your 401k money effectively during retirement is fairly simple...
Step1~ Have a plan for your investments. Remember, you have retired from your job, not your investments.
Step2~ Be as involved in your money management as you were before retirement. Asset allocation and periodic evaluation are rules you will need all your life.
Step3~ Study all the options you have before you make a choice.
Step4~ Choose a beneficiary and an alternative beneficiary for your money.
Step5~ Hire a professional money manager to help you with your options.
Step6~ Leave your money in the 401k itself if you are happy with your investment options.
Step7~ Rollover your money directly into an IRA which will help you avoid the 20% withholding to pay off income taxes.
Step8~ You can choose to invest in annuities, which will give you a fixed payment all your life. The demerit of this option is that your payment will be fixed and won’t be able to combat inflation.
Joe
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smkettner
Southern CA
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Don't do anything for at least a year after retirement.
If you want out of the employer plan transfer it to an IRA at a different company such as your bank or into a low cost Vangaurd fund.
Variable annuity, I would pass.
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Chuck&Gail
In the Colorado Mountains
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IMO check around. We diod several different things with the money when I retired, but found Fidelity had the best ROI on almost everything, annuities (of which we bought two) included. IMO SHOP AROUND.
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matthewc66
San Diego
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I would look for a financial planner who charges a flat fee instead of a percentage of assets.
I would also ask for them to disclose if they receive commissions on any of the funds they sell you.
I would also look to diverisfy between asset classes and bonds.
If it were me I would look to do the following:
35% Vanguard Total Stock Market Index
20% An international fund like Oakmark International
10& Reit like CGM Realty
5% Small Cap like Wasatch
30% Bonds
I would always make sure the expense ratios are low and there is "no load".
I wouldnt gamble with your future. A fee only planner who doesn't sell any type of investments is the way to go.
I wouldnt mess with annuities..
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wa8yxm
Wherever I happen to park
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Annunities may or may not be a good investment.. 59 1/2 is the age at which you can start drawing not "4 years from now" but six months.
PM me and let me know the general area where you live and I might be able to give you a referral.
I can NOT, at this time, handle your account.
I know one Variable annuity that has a guaranteed annual payout of 5% of the fund's peak value.. I can not sell it to you or tell you more about it but if you PM me I can likely lead you to someone who can.
If you happen to be close by me.. I can TAKE you to someone who can. I still don't get paid though. 
Nothin adds excitment like something that is none of your business
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fla-gypsy
North Florida
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No they are not a good investment, this is no place for financial advice that will effect your future happiness, these people can't even agree on the simplest of matters. Please see a proffesional financial planner
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snocrossmechanic
Minnesota
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AMAZING !!! You all are giving this person recommendations without knowing anything about his portfolio, goals, needs, and most important risk tolerance.
NONE OF YOU have any idea what he needs be it an annuity, stocks, bonds, mutual funds, or sticking it in a tin can.
Not sure about the other responders but I am a financial advisor and all I would tell you now is to seek out an advisor who understands your goals. If they understand your goals and can help you achieve them then what does it matter if the charge by the product or a flat fee or a percentage. If they dont understand where you need to be then fees mean nothing. Meet a few advisors. Ask them what their philosophy is. Let a couple run with your info and see what they recomend. NEVER pay for a financial plan unless you have a complicated need. There are many firms that will provide one for free. If the advisor trys to sell you a plan first then move on.
As for some of the posts I would say that each product has its own M&E charges and 12B-1 fees. Expense ratios mean nothing. One important thing to understand is there is no such thing as a "no load" fund. Within the 3 types of share classes you have fees. The "no loads" may not have a sales charge but has much higher 12B-1 fees (ongoing mgmt fees for simple explanation). If you intend on keeping a mutual fund for a long period of time then no loads cost you more. There is no free lunch. The article on annuities has percentages that are in error and the document was written in 1996. The capitol gains tax is currently 15% and the amounts you can invest are significantly higher. That document is worthless for todays discussions. It also adresses dollars to be invested after retirement funds have be fullfiled. It does not address a rollover from a qualified plan. Diversification is the key. Rebalancing is the second task that needs to be done with some frequency. Understanding taxes can save you more than your rate of return.
Be involved with your accounts. Meet with your advisor at least once a year, if not more. Most important is to not use a public forum to discuss a very presonal retirement matter. Each person is different and this is not the place for the discussion.
CONGRATS on retirement. Many never get the option. Now is the time to enjoy life to the max.
Mark
* This post was
edited 05/08/08 10:56pm by snocrossmechanic *
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