401k Rollover recommedations? - Cat Forum : Cat Discussion Forums
 
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post #1 of 7 (permalink) Old 08-24-2005, 10:00 PM Thread Starter
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401k Rollover recommedations?

I am just going to roll a limited amount out of my 401k. They won't let me take a hardship withdraw for college because I don't work for the company anymore. With a IRA I can take the hardship withdraw. They have a low cost fund so I am leaving most of it there but want a little for expenses like paying for tuition, books, mortgage payment, ect. I have an early withdrawl penalty if I take a 'regular withdrawl'.

Any good low cost options or big theives I should stay away from? Advice? Warnings?
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post #2 of 7 (permalink) Old 08-24-2005, 10:06 PM
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Your best bet to start would be to roll all of the money out of the 401(k) into an IRA. Even if you don't need it all for college expenses, you can do much better having your IRA managed by a professional. You have no control over it in a plan sponsored by a company you no longer work for, and you currently have few investment options.

I'm not really clear what your question is. Are you looking for someone to help you manage your money, or a low-cost brokerage to place it in and manage it yourself?

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post #3 of 7 (permalink) Old 08-24-2005, 10:23 PM Thread Starter
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Probally manage it myself. The company I have it with does have alot of options but I already have the best options they offer with a very low service fee at 7 cents per $100. I could put it in other funds but the family of funds they added is more costly like $1.50 per $100, which is about what most funds cost.

That's why a proffessional doesn't sound attactive. The compounding interest will be best if I leave most of it alone, in theory.
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post #4 of 7 (permalink) Old 08-24-2005, 10:32 PM
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It's important not to focus on the fees alone. You also need to consider the return on the investment. If you can make a good return on an investment with an excellent track record, it's worth paying a higher fee which will be more than offset by the return of the higher-quality investment.

Since you mentioned your account accruing interest, it sounds like you have your money in a money market account. Are you trying to preserve these assets for future college expenses, or grow them for retirement? This will help you determine what type of vehicle your money should be in, and whether or not you should consider professional management.

Owned by Pepper and Pumpkin RIP Snickers 8/22/00 -- 11/28/06

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post #5 of 7 (permalink) Old 08-24-2005, 10:55 PM Thread Starter
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Grow them for retirement, compounding interest, not to be confused with simple interest. I am 100% stocks being that I am foreseeing a 27 year time horizon. I really wanted to keep it for retirement but am willing to compromise small amount's of it because I hate credit card debt.

I only get enough student loan money for just the tuition, and work to keep up with the other expenses that are finally catching up and consuming me.
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post #6 of 7 (permalink) Old 08-24-2005, 11:03 PM
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Yes, compounding interest, you did say that. My error.

So you are invested in a stock mutual fund then?

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post #7 of 7 (permalink) Old 08-25-2005, 05:28 AM Thread Starter
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Yes, most in a S&P 500 index, then smaller international index, small index, and IBM stock. Sorry I ain't got back sooner as I was wiped out last nite. The S&P has been real slow lately though, but since the new rules the dividends are a little better and that is just rolled back into the fund. The Vanguard family of funds are the others I could choose from, but with the service fee being so low I figure it's best to have more pennies to compound interest. I was a warehouse worker at the time so it's not a whole lot of princible and that's why I am very sparing about moving it or using it up. There is a certain point though where one must consider using an asset versus using a credit card that I won't have the money in budget to make payments comfortably being I already have a tight budget.
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