Post-401k

I'm leaving my full-time job for one that does not offer a 401k.
What should I do with the 401k I have? Where does it need to go, Financial planner? Bank?

And Do I have to pay for the service, or does it come out of the 401k funds?

 

I saw my financial planner and rolled my old 401K into an annuity and an IRA. I can't remember how I paid for it but dumping the 401 K is the first thing you need to do.

 

I do NOT want to leave it in the 401K. The return is shit.
Can a bank do the IRA or annuity, or should I shop around for a financial planner?

 

Outside of, oh, I dunno, sex...I can't imagine a worse question to ask on this board.

Go get some professional advice please!

 

Solid advice throughout, Ragu.

When I left a longtime job with a decent-sized 401(K), I rolled it into a Fidelity annuity. They eventually gave me some options for having active management of my holdings or more of a self-directed approach. I've got a guy there assigned to me with whom I consult maybe twice a year, though I can contact him when needed. But I passed on the active management thing because it was going to be several thousand dollars a year (a flat %, rather than fee only) off the top. In a better world, the managers would have a sliding scale for their compensation, earning more as the return they produce for you increases. Better still, it would be tied to the positive gap between their particular return and comparable returns in similar sectors of investing.

So I'm doing the self-directed thing and sticking mostly to the lower cost, broader index funds. This year of course has been strong, but you need to have the stomach for the downturns. I'm far enough away from tapping into the IRA (I hope) that I refuse to let the dips bother me. At some point, though, I'll want to take some gains off the table into more of a fixed, low-risk investment and hopefully just be "playing" only with the house's money.

At some point I'll have to look at annuitizing some of the nest egg to provide an income stream that will supplement Social Security and the piddly pension that my previous employer froze even before I left. My current employer doesn't have any pension. I stick enough in this one's 401(K) to get their company match. It's also Fidelity, separate from my IRA, with a decent selection of investment options.

Proud that we convinced our kid to stick money aside for retirement as soon as full-time employment came along. That whole compounding thing can be dazzling, if you start young enough. I didn't get going till my 30s.

 

Roll the 401K into an IRA. More options.

Also, find a fee-only financial sort. Some are probably sharp enough to do it themselves, but I remain convinced that the financial sorts have ins and know a lot more than many of us think we do.

Joe Williams, preach. Solid advice to the kids.

 

The return is . . . what you make of it based on your investment choices. Unless your fund is such that you have no choices.

 

I used to work as a 401(k) plan administrator helping manage accounts for a portion of the 40,000 employees. One of my main jobs was helping former employees move their money out of the 401(k) to wherever they wanted.

So I'm pretty qualified to answer this ... follow TigerVols' advice and go see a professional advisor. Don't wing it. Don't Google for advice and cobble together a plan on your own. Get professional help.

 

C'mon, Ragu, we all know that's the short answer. And this is the greatest sentence ever written.

 

Respectfully disagree. I think Big Ragu offers good advice. And it was free.

This is only rocket science to those who want to make it such. Retirement investing is fairly idiot proof. Choose an index fund with your target retirement date. It will automatically get more conservative (i.e., more bonds, fewer equities) as your retirement approaches.

To the OP, if your return has been "shit" in the 401k, I'm curious what kind of fund(s) you have it invested in....If you're under, say, 40, and were investing in the most basic retirement target fund (that I would be willing to bet every 401k offers), you would be doing extremely well over the last few years as the stock market has soared.

You can roll over your 401k to an IRA (which is what I did eventually), but there's no urgency to do so. They're not going to take your money away. And assuming you have it invested in a smart plan, it will continue to grow.

 

Everyone should go check on their retirement account(s) right now. If you haven't had a double-digit gain so far this year, you're throwing away money and you need to fix that pronto.