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  #31  
Old 12-17-2020, 09:36 AM
retiredguy123 retiredguy123 is offline
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While it may be a good idea to hire a "financial advisor" if you need assistance with your money, not all of them are the same. Anyone can call themselves a financial advisor, but many are actually a life insurance salesperson or stock broker in disguise. For example, I have known many people who have been advised by a life insurance salesperson to transfer all of their money into an annuity, which yields a huge commission for the "advisor", and is usually a bad investment. They didn't even realize that the annuity product they purchased was a life insurance product because the advisor told them that it was a retirement investment, and never used the word annuity or insurance. If you hire a financial advisor, you should get a signed statement from him/her that they are acting as a "fiduciary" for you. This will provide some legal protection, but you should also ask a lot of questions and get more than one opinion. You should also ask the advisor how they make money, by commission or by charging you a fee for their time.
  #32  
Old 12-17-2020, 09:56 AM
Hape2Bhr Hape2Bhr is offline
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Originally Posted by retiredguy123 View Post
Huh? The way I understand the rule, you must take the RMD in the year that you turn 72. So, if you turn 72 in 2021, you must take the RMD starting in 2021, and every year thereafter. It doesn't matter when you take it during year, it is taxable income for the 2021 tax year. The RMD was waived for 2020 because of COVID.
This from the IRS website:

Beginning date for your first required minimum distribution

IRAs (including SEPs and SIMPLE IRAs)
April 1 of the year following the calendar year in which you reach age 70½, if you were born before July 1, 1949.
April 1 of the year following the calendar year in which you reach age 72, if you were born after Jun 30, 1949.
  #33  
Old 12-17-2020, 10:03 AM
lawgolfer lawgolfer is offline
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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.
  #34  
Old 12-17-2020, 10:11 AM
dougawhite dougawhite is offline
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A 401K has one advantage over an IRA if you were 55 or older when separated from your last employer you can
cash out from the 401K without incurring the extra 10% income tax penalty
(obviously it would be taxable income, but not penalized). You can't do that if you convert the 401K funds to an IRA.
  #35  
Old 12-17-2020, 10:22 AM
chrissy2231 chrissy2231 is offline
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Transfer to Paul at Raymond James in Brownwood. Then buy silver & gold. Silver doubled since I bought it.
  #36  
Old 12-17-2020, 10:26 AM
retiredguy123 retiredguy123 is offline
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Quote:
Originally Posted by Hape2Bhr View Post
This from the IRS website:

Beginning date for your first required minimum distribution

IRAs (including SEPs and SIMPLE IRAs)
April 1 of the year following the calendar year in which you reach age 70½, if you were born before July 1, 1949.
April 1 of the year following the calendar year in which you reach age 72, if you were born after Jun 30, 1949.
Thanks, that is correct. But, to clarify, the April 1 deadline for taking the RMD only applies for the first year that you have an RMD. For all following years, you are required to make the RMD by December 31 of the RMD year.
  #37  
Old 12-17-2020, 11:04 AM
waynehal55 waynehal55 is offline
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Quote:
Originally Posted by retiredguy123 View Post
I would suggest that you set up an IRA account with Vanguard or another low cost investment company. Then, do a direct transfer of all assets from the 401K account into the IRA, and maintain a similar asset allocation. I would not feel comfortable leaving my money in a 401K plan when an IRA allows me to totally control the assets and how they are invested. And, you will probably save money on the management fees. It was one of the first things I did when I retired.
I totally agree with you.I have invested with Vanguard for 40 years now,
they are a great company,owned by the shareholders.
  #38  
Old 12-17-2020, 11:12 AM
Yjacket74 Yjacket74 is offline
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Quote:
Originally Posted by retiredguy123 View Post
Huh? The way I understand the rule, you must take the RMD in the year that you turn 72. So, if you turn 72 in 2021, you must take the RMD starting in 2021, and every year thereafter. It doesn't matter when you take it during year, it is taxable income for the 2021 tax year. The RMD was waived for 2020 because of COVID.
Hape2Bhr is correct. I copied the following text from the 2019 IRS publication 590-B Distributions from Individual Retirement Account (IRAs):

What’s New for 2020
Required minimum distributions (RMDs). For distributions required to be made after December 31, 2019, the age for beginning mandatory distributions is changed to age 72 for IRA owners reaching age 70 ½ after December 31, 2019. The required beginning date for IRA owners who haven't reached age 70 1/2 by the end of 2019 is April 1st of the year following the year of the owner’s 72nd birthday.
  #39  
Old 12-17-2020, 11:14 AM
KRM0614 KRM0614 is offline
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Quote:
Originally Posted by Rga20 View Post
Now that I've finally retired what do I do with my 401k. Don't anticipate needing the money but don't want to lose it either. Appreciate your inputs.
For long term ETF stocks are good with a reserve of cash for future trades. Negotiate with investment advisors but do your homework on mutual funds and avoid bonds except corporate for solid corps
  #40  
Old 12-17-2020, 11:19 AM
Blackbird45 Blackbird45 is offline
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As far as the withdrawal I invest in a utility which is a safe investment and dividend covers what I am forces to remove.
Plus it went up in value 20% over the past 4 months.
  #41  
Old 12-17-2020, 12:32 PM
chas39 chas39 is offline
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Quote:
Originally Posted by Rga20 View Post
Now that I've finally retired what do I do with my 401k. Don't anticipate needing the money but don't want to lose it either. Appreciate your inputs.
Start moving some each year to savings or a regular account
  #42  
Old 12-17-2020, 12:34 PM
shirleyjerez shirleyjerez is offline
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I have an excellent Financial advisor . Dale Cebert. He will always look out for you. I have had him for 20 yrs . I have got lots of friends who use him and love him
  #43  
Old 12-17-2020, 12:55 PM
Stu from NYC Stu from NYC is offline
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Quote:
Originally Posted by retiredguy123 View Post
While it may be a good idea to hire a "financial advisor" if you need assistance with your money, not all of them are the same. Anyone can call themselves a financial advisor, but many are actually a life insurance salesperson or stock broker in disguise. For example, I have known many people who have been advised by a life insurance salesperson to transfer all of their money into an annuity, which yields a huge commission for the "advisor", and is usually a bad investment. They didn't even realize that the annuity product they purchased was a life insurance product because the advisor told them that it was a retirement investment, and never used the word annuity or insurance. If you hire a financial advisor, you should get a signed statement from him/her that they are acting as a "fiduciary" for you. This will provide some legal protection, but you should also ask a lot of questions and get more than one opinion. You should also ask the advisor how they make money, by commission or by charging you a fee for their time.
Very true. Have to ask how they make money, best to go to someone who charges a fee for giving advise.
  #44  
Old 12-17-2020, 01:13 PM
Carla B Carla B is offline
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Originally Posted by Stu from NYC View Post
Very true. Have to ask how they make money, best to go to someone who charges a fee for giving advise.
Can you name any around here? I'd like to know.
  #45  
Old 12-17-2020, 01:55 PM
Joe C. Joe C. is offline
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I'd call Blackston Financial .... they are on 466 just east of Morse Blvd, and just west of the Golf cart store.
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