Comments on: A Retirement Question From a Reader

By: Denise

Denise — Mon, 27 Aug 2007 10:29:55 +0000

I have more of an operational response…
Be careful with your rollover. I have seen thousands of examples of rollovers gone bad. Things you should check for include:
—-Make sure that the balance you rollover is (all of it) in fact rollover eligible.
—-Do you have after-tax amounts in your account? If yes- do you want to rollover those amounts as well? Check into the effect of rolling over such amounts. It’s not a bad thing- but it’s not for everyone.
—-Do you have employer stocks in your account balance? In most cases, it is more advantageous not to rollover these amounts.

To avoid withholding tax- be sure to move amounts you want to rollover as a ‘direct rollover’ –defined at http://www.retirementdictionary.com/Direct-rollover.htm

Good luck

Denise

By: Dylan

Dylan — Wed, 22 Aug 2007 19:30:44 +0000

Good tips! It generally makes little sense to roll an already tax deferred retirement plan into an insurance product unless you like limited options and higher fees.

Another great resource for finding fee-only financial planners that do planning on an hourly, as need basis is the Garrett Planning Network, http://www.garrettplanningnetwork.com. Hourly is a good way to go if you want to implement the investment advice yourself using a discount brokerage.

By: thc

thc — Wed, 22 Aug 2007 00:55:33 +0000

Sounds like annuity-city to me! And this is one veteran advisor who’s not crazy about insurance products.

By: muddlehead

muddlehead — Wed, 22 Aug 2007 00:26:33 +0000

the last place i would roll it to is a life insurance company. the second to last place would be a bank. the third to last is a full commission brokerage firm. reason is the same for all three. conflict of interest.

By: Al Brockman

Al Brockman — Tue, 21 Aug 2007 22:39:17 +0000

Hi – I have been there and done that. I’m now retired and have rolled over several 403B accounts, as well as a 457. First, ask the NYL agent what fees are associated with his rollover. No, scratch that – I wouldn’t even bother.

Sounds like you could use some hand holding but might not be ready for a financial planner. My suggestion is to go to one of the big Mutual Fund Companies. They have work groups that specialize in Rollovers. If you live in or near a largish (is that a word)city, look for one of their local offices.

Personally, I have used Fidelity (there’s an office in Providence) and found that they can’t be beat for personal service. They have helped with some very complicated transactions and just never gave up. When you call their 800 number, you always get a helpful person who really seems to care about customer service. Finally, they run seminars (free) on financial planning and retirement planning. And, no, I do not work for or even know anyone who works for Fidelity. I just understand and appreciate quality customer service.

A long comment but, hopefully, a helpful one.

By: Spokane Al

Spokane Al — Tue, 21 Aug 2007 22:06:51 +0000

I thought your advice was sound and would like to add my two cents to the mix. The reader asked about rolling his/her 401k to an agent with New York Life. This worries me greatly. If this is a captive agent, he/she most likely does not possess any securities licenses and is only insurance product licensed. This means that the only solution will be an annuity.

This would hardly be the best solution for the client and instead would be the “one size fits all” solution that is best for New York Life and the agent.

I truly hope the writer follows your advice via a certified financial planner or Vanguard.