1. Go to the Chas. Schwab office at Lake Sumter. You will be assigned an advisor, who will be a registered broker. All Schwab advisors are salaried and do not receive commissions. Convert the 401K to an IRA. The advisor will have all the forms and will do all the work.
2. Schwab charges next to nothing for trades when you use its website. It has mutual funds of every variety (i.e. Dow 30, S&P 500, Emerging Markets etc). If you do nothing else, put your money in an "index fund" which mirrors the market. On average, the S&P 500 has gained 10%/yr over our lifetimes and there is no reason to believe this will change.
3. Depending on your other income, your Federal Tax rate, and the size of your expected estate, you will need to consider converting some or all of your funds to a Roth IRA. The Roth IRA is the only "gift" taxpayers have ever been given by the government. For any part of your 401K or regular IRA which you convert to a Roth, that amount will have to be included in your taxable income for the year of the conversion. However, once your money is in a Roth, any increase in the value of the account and any distribution you take is free of all taxes. Finally, any amount in a Roth which goes to a beneficiary on your death, he/she receives free of income tax, although there are time limits, roughly 10 years, within which the beneficiary must withdraw the money from the Roth.
4. Schwab's advisor will walk you through all this. You will be shocked to learn what the administrator/manager/advisor of your 401K has been charging you and what you will save by placing your account at Schwab. I learned this lesson 30 years ago when a new partner joined our firm. He had been a stockbroker. At the time, our pension/profit sharing fund was managed by Manulife. I and the other partners regularly worked 10-12 hr/day. At the end of the year, Manulife calculated the amount we could contribute to the fund and we sent a check. Until the new partner pointed out what we were paying Manulife, none of us had a clue. We changed to a self-directed fund and moved the money to Chas. Schwab, saving large amounts each year thereafter. Over the remaining course of my career, the total savings were significant.
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