401K Question

[ageecee]

Wifey will be quiiting her work the end of September. She has a small 401K at work. She will have to roll it over to avoid taxes and penalties.


What is the best way to roll it over?

1-Stockbroker
2-Bank
3-Contact a mutual fund direct

Any ideas fellas?

 

[bryanz]

Wifey will be quiiting her work the end of September. She has a small 401K at work. She will have to roll it over to avoid taxes and penalties.


What is the best way to roll it over?

1-Stockbroker
2-Bank
3-Contact a mutual fund direct

Any ideas fellas?

There really isn't a best way. If you have a long term profitable relationship, with a stockbroker you can trust ,that is an option. If you have a relationship with someone at your bank that could be an option also. If you have an understanding of the market and have invested in mutual funds in the past directly that is a great option. You need to make sure which ever way you go, don't let fees and commissions eat you up. Is this her only retirement account ? how old is she ? what are her objectives ? These are some of the questions someone would need to have answered to invest her 401 in the correct vehicle. When buying a mutual fund, I would stay away from a hot one. I have seen many people buy a fund because it has done great in the past and has made a big move up. Look for funds that have done well in the past and has the same fund managers, and is down when you decide to buy in. BOTTOM LINE: IT ALL DEPENDS ON YOUR KNOWLEDGE OF THE MARKET AND THE KNOWLEDGE OF THE PEOPLE YOU TRUST TO HELP YOU.

 

[ageecee]

There really isn't a best way. If you have a long term profitable relationship, with a stockbroker you can trust ,that is an option. If you have a relationship with someone at your bank that could be an option also. If you have an understanding of the market and have invested in mutual funds in the past directly that is a great option. You need to make sure which ever way you go, don't let fees and commissions eat you up. Is this her only retirement account ? how old is she ? what are her objectives ? These are some of the questions someone would need to have answered to invest her 401 in the correct vehicle. When buying a mutual fund, I would stay away from a hot one. I have seen many people buy a fund because it has done great in the past and has made a big move up. Look for funds that have done well in the past and has the same fund managers, and is down when you decide to buy in. BOTTOM LINE: IT ALL DEPENDS ON YOUR KNOWLEDGE OF THE MARKET AND THE KNOWLEDGE OF THE PEOPLE YOU TRUST TO HELP YOU.

Thanks for the response.


36 yr old and its a long term investment for her till at least age 60 and this is her only retirement account. As long as the money is safe shes fine with that. You know how women are-"Well what if i lose money one year"?

She will still contribute to the 401K because she will do some contract work(consulting) on her own time and will use some of that money to contribute to the 401. probably about $300 per month will go into the account..

Im thinking about some mutual funds that have done well over a period of time for her.

 

[bryanz]

At 30, time is on your side. I would look at growth funds and international funds. I'm not saying go wild,but don't be to conservative. Loosing money one yr is not a bad thing in your 401 when you are 30 yrs old and in the right place. You said it, long term, think long term and big picture. Find funds that let you put small initial investments in so that you can spread it around. It's amazing what a single dollar can turn into in 30 yrs. What is good today may not be in 5 or 10 yrs. lock in profits and move into different positions as the years go by. She should have a voice in the process, you said she will be doing consulting work. Stick to investment that you two understand, maybe start with the field or industry that one or both of you work in. If you don't understand it don't buy it. I know you were probably looking for more specific direction but I think it is so important for a person to understand the process you have to go threw to get to an investment decision. Where ever you get your advice from, you should only take it, and execute it, if it becomes your own.

 

[ageecee]

At 30, time is on your side. I would look at growth funds and international funds. I'm not saying go wild,but don't be to conservative. Loosing money one yr is not a bad thing in your 401 when you are 30 yrs old and in the right place. You said it, long term, think long term and big picture. Find funds that let you put small initial investments in so that you can spread it around. It's amazing what a single dollar can turn into in 30 yrs. What is good today may not be in 5 or 10 yrs. lock in profits and move into different positions as the years go by. She should have a voice in the process, you said she will be doing consulting work. Stick to investment that you two understand, maybe start with the field or industry that one or both of you work in. If you don't understand it don't buy it. I know you were probably looking for more specific direction but I think it is so important for a person to understand the process you have to go threw to get to an investment decision. Where ever you get your advice from, you should only take it, and execute it, if it becomes your own.

Great info bryanz i really appreciate the response. Im thinking we might go to a broker here in town that i know and maybe get his opinion on what funds she should invest in. She might feel more comfortable with him giving her suggestions on where to invest.

 

[s_dooley24]

This article offers up some insight and choices with regards to mutual funds

http://news.morningstar.com/article/article.asp?id=124450&_QSBPA=Y&asection=archive&pgid=wwhome3b

 

[ageecee]

Thanks dooley thats good info..