The trouble with most companies' 401(k) plans is that it's up to the individual to manage them. Most of us don't have the time nor skills to do that effectively. In addition, the plans usually have very limited investment choices. I agree with Mark (snocrossmechanic) interview some financial advisors and then pick one to manage your investments.
The problem with an annuity is once done, you lose control of your own money. Both my wife & I had them. Both our agents told us NOT to annuitize because, once you do that, you're locked into whatever you chose at that particular time. If you die early there is the possibility of losing part of your principal. A friend annutized hers at age 62, now almost 74. When she dies nobody else gets anything. Essentially what she is getting is the interest and the company keeps the principal. We both rolled ours into self-directed IRAs. I'm at the age where the law says I MUST withdraw so I take the minimum required. I can take more if I want to. My wife will reach that age in a couple of years and plans to take only that required by law. In a self directed IRA, YOU make the investment decisions. Ours are done through Edward Jones but any brokerage ought to be able to accomodate you.
RRUGG
2008 Dodge 2500 QC 4x4 SB Cummins 6 speed auto 3.73
1997 Holiday Rambler 29FK travel trailer
2006 Summit 22RB travel trailer
2003 Dodge Grand Caravan Sport
Bob & Grace professional retirees
Good Sam life members
snocrossmechanic wrote: 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.
Actually Mark, at least two of us, Myself included, Recommended that he consult a professional in the field.. I offered to refer him if he PMed me and the other post I read (I did not read all posts) simply said "Consult a professional" or words to that effect
So not all of us are giving him bad, advice
As to annunities.. As I said, they may or may not be good, Some are, Some are not, some are better, some are worse and of course there are other options a professional can discuss with him.
Other than very generic stuff (See above) I can make no recommendation over the internet save: Consult with a professional,, And so I, and at least one other, did.. I take you you are giving the same advice.
I am not YET a professional in this field,, Give me a month or two and I might be
Nothin adds excitment like something that is none of your business John is Near Kenwood TS-2000 housed in a 2005 Damon Intruder 377
captain crunch wrote: 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
Never, ever buy an annuity of any kind from anybody, and never, ever spend time with annuity or insurance salesmen that are selling them. Get your money away from your employer as soon as you can. You can contact Vanguard or Fidelity to "roll over" these monies directly to your new self-directed retirement accounts with them.
As far as many of the other posts here, I would strongly suggest you learn to invest these dollars yourself. In no-load mutual funds and stock indexes at either Fidelity or Vanguard. Stay away from financial planners, you do not need them. And run from anyone that "guarantees" you a 5% return, with hopes of 10% or greater, they are scammers in my opinion. They are not in business without taking money from you that can be working in-the-market. If these financial planners and high end stock brokers knew so much, they wouldn't need your money to live on, or doing what they can to get it......think about it.
I have directed my own portfolio since I was 22 years old, I'm now 56 yrs. old. I've never had more fun in my life by saving a few dollars a year and investing them. I started buying from Omaha Discount Brokerage which later became Ameritrade in my hometown of Omaha, NE. Several years later I started buying stock through Charles Schwab, and Olde Discount in Dallas, Texas. Today, I work primarily with the Vanguard Group of no-load mutual funds. They are simply the best I know of.
shadoow wrote: 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.
I completely agree with this advice!
Cat
(Jim just reads the forum once in a while)
Our '04 Sunline T2499 & Silverado picture is on the profile page
Live simply, love wholly, give generously, care deeply, speak kindly.
Skid Row Joe wrote: ....Never, ever buy an annuity of any kind from anybody, and never, ever spend time with annuity or insurance salesmen that are selling them. Get your money away from your employer as soon as you can. You can contact Vanguard or Fidelity to "roll over" these monies directly to your new self-directed retirement accounts with them.
As far as many of the other posts here, I would strongly suggest you learn to invest these dollars yourself. In no-load mutual funds and stock indexes at either Fidelity or Vanguard. Stay away from financial planners, you do not need them. And run from anyone that "guarantees" you a 5% return, with hopes of 10% or greater, they are scammers in my opinion. They are not in business without taking money from you that can be working in-the-market. If these financial planners and high end stock brokers knew so much, they wouldn't need your money to live on, or doing what they can to get it......think about it.
They are simply the best I know of.
....and you got your degree in finance where?
My advice to the OP would be to disregard anything and everything he picks up from a public message board.
snocrossmechanic wrote: 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
A lot of good advice. I retired at age 48 with several 401k's. I always managed them myself and after retirement I rolled them all into one IRA variable annuity 72t distribution plan. I now fully manage it on my own. But I do have a business degree and fully understand how to play the market. That is the only reason I was able to retire so young.
Now is not the time to gamble/guess/or leave your future net worth up to your previous employer. If you don't need the money right away then wait until you're 59 1/2. If you worked at that employer for more than 5 years then you can take out some cash immediately per IRS rulings. Otherwise at 59 1/2 you can take some out for expenses without incurring the 10% penalty for early withdrawal. Roll over the rest with the advice and counseling of a financial planner. If you need the money right away then you will also need to start a 72t early distribution set up.
Fork over the money to an independent financial advisor. He can help.
2006 CHEV 2500HD
2006 Forest River Cherokee Wolfpack 295WP
2001 HD Softail Classic
Wife and dog
Offline
