Investment planning an 401K Rollover

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Investment planning an 401K Rollover

Postby investorQ » Sat May 12, 2012 11:22 pm

Quick questions regarding my portfolio and rolling over 401K to an IRA. I wanted some advice on my portfolio. I am client of First Command and have been for awhile. I have really had it with them and want to move my money elsewhere. USAA have been in contact with me and seem interesting. Do you have any advice on USAA investment products? USAA recommended me a 53/43 moderately aggressive model. My wife has a 401K that’s with Caremark but another company bought which is Amerisource Bergen. Should she roll over to an IRA, go with new company 401K, or mixture of both. She currently doesn’t have an IRA but I do.



Emergency funds YES

Debt: NONE

Tax Filing Status: Married filing Jointly

Tax Rate: 15% Federal 0% State TX (military)
Age: 37 spouse: 40

Desired Asset allocation: 60/40
Intl allocation: 50% of stocks


My Current portfolio is managed by First Command 123,844.07
ER: 1.19%, 1.58%, 1.25%, 1.18%, 1.07%, 1.03%
I was investing $950 a month but stopped in January, I only contribute to my Roth IRA $350 a month


Asset Allocation
70.15 US Stocks
19.29 Non US Stocks
5.73 Bonds
2.83 Other
1.99 Cash
1 YR ( 5.91)
3YR ( 18.72)
5YR (.17)
10YR (5.41)

Fidelity Advisor Equity Growth Fund EPGAX $6,820.27(1.19%)
Invesco International Small Company Fund IEGAX $13,504.17 (1.58%)
Pioneer Independence Voluntary Fund PINDX $39,099.42(1.25%)
Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA (1.25%)
Pioneer Cullen Value Fund CVFCX $14,153.00 (1.18%)
Fidelity Advisor New Insights Fund FNIAX $11,848.91 (1.07%)
Fidelity Advisor Strategic Real Return F FSRAX $11,095.23 (1.03%)


SPOUSE has 14,000 in Caremark 401k
Fixed income 100%
Her 401K matched 100% on 5% (old)
Amerisource (new Company) Match 100% on first 3% and 50% on next 2%


I need guidance in choosing mutual funds that will earn me a better rate of return.
Last edited by investorQ on Tue May 15, 2012 9:15 pm, edited 1 time in total.
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Re: Investment planning an 401K Rollover

Postby Johm221122 » Sun May 13, 2012 9:48 am

70% stocks aggressive for 40
Can you move 401(still employed)?
Can your wife roll over?(does she have choice)
23% cash high
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Re: Investment planning an 401K Rollover

Postby dbr » Sun May 13, 2012 9:55 am

USAA is a great insurance company, a fine bank, and a perfectly competent brokerage.

USAA funds are too expensive and they do not offer the selection of low cost index funds you need.

As much as USAA is a fine organization, you probably would be better off rolling into an IRA at Vanguard and buying Vanguard mutual funds. An IRA account at USAA could buy Vanguard funds and ETF's at a transaction cost. If the principal is large and trading is minimal there would be negligible cost to this.

I doubt USAA would have meaningful financial advice to offer, nor would Vanguard.

I am a forty-four year USAA member.
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Re: Investment planning an 401K Rollover

Postby retiredjg » Sun May 13, 2012 9:59 am

InvestorQ, welcome to the forum!

It's difficult to understand just what you have. Please see the link at the bottom of this message. Follow that format as closely as you can to get the best answers. You can use the edit button on your original post to add information.

You are in the military, but you did not mention a TSP account. Do you have one?

You can do better than USAA for your investments.
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Re: Investment planning an 401K Rollover

Postby investorQ » Sun May 13, 2012 7:02 pm

retiredjg

This is my current portfolio. I don' have a TSP. I think I can do better investing my own money plus they don't match your contributions. I also was just giving the breakdown of my portfolio as well as the returns since I started.

My Current portfolio 123,844.07

Asset Allocation
70.15 US Stocks
19.29 Non US Stocks
5.73 Bonds
2.83 Other
1.99 Cash
Returns
1 YR ( 5.91) 3YR ( 18.72) 5YR (.17) 10YR (5.41) (11-30-2011)

Fidelity Advisor Equity Growth Fund EPGAX $6,820.27(1.19)
Invesco International Small Company Fund IEGAX $13,504.17 (1.58)
Pioneer Independence Voluntary Fund PINDX $39,099.42(1.25)

Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA (1.25)

Pioneer Cullen Value Fund CVFCX $14,153.00 (1.18)

Fidelity Advisor New Insights Fund FNIAX $11,848.91 (1.07)

Fidelity Advisor Strategic Real Return F FSRAX $11,095.23 (1.03
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Re: Investment planning an 401K Rollover

Postby investorQ » Sun May 13, 2012 7:09 pm

Johm221122

What is a good mixture of stocks and bonds at 40?
My wife is still employed and yes she has to make a choice now one what to do with the 401K. (cash out, roll over to new company, or IRA)
I have been investing roughly 23% of my salary for about 10 yrs now but now I have reduced my contributions. I was trying to invest as much as I could while I was young.
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Re: Investment planning an 401K Rollover

Postby retiredjg » Sun May 13, 2012 9:16 pm

investorQ wrote:I don' have a TSP. I think I can do better investing my own money plus they don't match your contributions.

The TSP tends to be underestimated by people who don't realize that the cost of investing is one of the most important factors involved.

You are paying over 1% each year in expenses for the funds you have chosen. In the TSP, you would be paying .025% - yes that's almost nothing. Let's say your investments bring in 5% - you will have lost more than 20% of your profit to expenses in the funds you chose. In the TSP, you would have lost .5% of your profits to expenses. See the difference?

People here are willing to help you set up a good portfolio for your family, but we have to know what you have to do that. Your original post is difficult to interpret. The closer you follow the format (see link below called "Asking Portfolio Questions", the more reliable the answers will be.
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Re: Investment planning an 401K Rollover

Postby retiredjg » Sun May 13, 2012 10:09 pm

Here's an example of how fees can eat into your profit. I had to substitute something for the C Fund - it's expense ratio is higher than the C fund, so this isn't even a fair comparison of fees. You could argue that your fund would do better than the 500 index, but that is unknowable. Sometimes it might, sometimes it might not.

http://apps.finra.org/fundanalyzer/1/fa.aspx
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Re: Investment planning an 401K Rollover

Postby retiredjg » Wed May 16, 2012 11:17 am

This is still not enough information to help, so I'm guessing you might be confused about what you need to tell us. Let's see if we can work that out. There are a lot of questions below - please be patient and just answer them all. They are all important. I've numbered them so you don't have to cut and paste answers if you don't want.

1) You apparently have an active 401k and a Roth IRA. Your wife has only a 401k. Is that correct or are there some other accounts (other than your emergency fund) that we need to include?


My Current portfolio is managed by First Command 123,844.07. I was investing $950 a month but stopped in January, I only contribute to my Roth IRA $350 a month.

Fidelity Advisor Equity Growth Fund EPGAX $6,820.27(1.19%)
Invesco International Small Company Fund IEGAX $13,504.17 (1.58%)
Pioneer Independence Voluntary Fund PINDX $39,099.42(1.25%)
Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA (1.25%)
Pioneer Cullen Value Fund CVFCX $14,153.00 (1.18%)
Fidelity Advisor New Insights Fund FNIAX $11,848.91 (1.07%)
Fidelity Advisor Strategic Real Return F FSRAX $11,095.23 (1.03%)

2) Is this your 401k, your Roth IRA, or a combination of the two? If it is a combination, please separate them. If it is only your 401k, please add information about your Roth IRA.

3) What are the choices you have in your 401k? We need to whole list to help you pick the best choices. Your current choices are not that great because the expense ratios are so high.


SPOUSE has 14,000 in Caremark 401k
Fixed income 100%
Her 401K matched 100% on 5% (old)
Amerisource (new Company) Match 100% on first 3% and 50% on next 2%

4) What are all the choices available from Amerisource? Please list the fund name, ticker symbol (if any exists), and the expense ratio for each fund.



My wife has a 401K that’s with Caremark but another company bought which is Amerisource Bergen. Should she roll over to an IRA, go with new company 401K, or mixture of both.

5) If she is in the same job, but has a new 401k provider, she may not be allowed to roll her money to an IRA. She may have to leave it in the 401k. But she may be allowed to leave the old money with the old 401k provider. See what you find out about what her choices are. If she can leave the old money with the old 401k provider, we'll need the list of what is available from them too.


6). You apparently both have jobs, but one is also involved with the military and has access to the TSP. What is the maximum amount you could put in the TSP each year? It is possible that putting the money into the TSP rather than either 401k is a better option, but the amount you put in the TSP will be limited by the military salary so we need to figure out how much can go into the TSP.


I need guidance in choosing mutual funds that will earn me a better return.

There are really only a couple of things that you can do to have a better return. One is to keep your costs very low. The other one is to be able to predict the future. That's why we concentrate so much on keeping costs low. :D
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Re: Investment planning an 401K Rollover

Postby investorQ » Wed May 30, 2012 1:44 am

retiredjg wrote:This is still not enough information to help, so I'm guessing you might be confused about what you need to tell us. Let's see if we can work that out. There are a lot of questions below - please be patient and just answer them all. They are all important. I've numbered them so you don't have to cut and paste answers if you don't want.

1) You apparently have an active 401k and a Roth IRA. Your wife has only a 401k. Is that correct or are there some other accounts (other than your emergency fund) that we need to include?

1) I have a Roth IRA and few taxable accounts with First Command . I don't have a 401K. Maybe you can recommend a better Roth at fidelity or vanguard.
Roth Accounts
Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA ER(1.25%)
Pioneer Cullen Value Fund CVFCX $14,153.00 ER(1.18%)

1) My wife has a 401K with Fidelity
Fidelity Freedom K 2035 Fund (FKTHX) $1065.15 ER( 0.63%)


My Current portfolio is managed by First Command 123,844.07. I was investing $950 a month but stopped in January, I only contribute to my Roth IRA $350 a month.

Fidelity Advisor Equity Growth Fund EPGAX $6,820.27(1.19%)
Invesco International Small Company Fund IEGAX $13,504.17 (1.58%)
Pioneer Independence Voluntary Fund PINDX $39,099.42(1.25%)
Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA (1.25%)
Pioneer Cullen Value Fund CVFCX $14,153.00 (1.18%)
Fidelity Advisor New Insights Fund FNIAX $11,848.91 (1.07%)
Fidelity Advisor Strategic Real Return F FSRAX $11,095.23 (1.03%)

2) Is this your 401k, your Roth IRA, or a combination of the two? If it is a combination, please separate them. If it is only your 401k, please add information about your Roth IRA.

2) This is my portfolio with First Command

My Roth IRA is a combination of
Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA ER(1.25%)
Pioneer Cullen Value Fund CVFCX $14,153.00 ER(1.18%)

3) What are the choices you have in your 401k? We need to whole list to help you pick the best choices. Your current choices are not that great because the expense ratios are so high.

Spouse 401K Choices are

SPOUSE has 14,000 in Caremark 401k
Fixed income 100%
Her 401K matched 100% on 5% (old)
Amerisource (new Company) Match 100% on first 3% and 50% on next 2%

4) What are all the choices available from Amerisource? Please list the fund name, ticker symbol (if any exists), and the expense ratio for each fund.

4) Americsource Choices
AmerisourceBergen Corporation Stock Fund (ABC ) ER $.029/share
Allianz NFJ Dividend Value Inst CL (NFJEX) ER 0.71%
Fidelity Growth Company Fund (FDGRX) ER 0.84%
JP Morgan US Equity Instl CL (JMUEX) ER 0.66%
Spartan 500 Index Fund - Institutional Class (FXSIX) ER 0.66%
Fidelity Low-Priced Stock Fund (FLPSX) ER 0.83%
Munder Mid Cap Core Growth Fund Class Y (MGOYX) ER 1.08%
RS Value (RSVAX) ER 1.33%
American Funds EuroPacific Growth Fund Class R-5 (RERFX) ER 0.55%
Fidelity Freedom K 2000 Fund (FFKBX) ER 0.41%
Fidelity Freedom K 2005 Fund (FFKVX) ER 0.49%
Fidelity Freedom K 2010 Fund (FFKCX) ER 0.52%
Fidelity Freedom K 2015 Fund (FKVFX) ER 0.52%
Fidelity Freedom K 2020 Fund (FFKDX) ER 0.56%
Fidelity Freedom K 2025 Fund (FKTWX) ER 0.59%
Fidelity Freedom K 2030 Fund (FFKEX) ER 0.61%
Fidelity Freedom K 2035 Fund (FKTHX) ER 0.63%
Fidelity Freedom K 2040 Fund (FFKFX) ER 0.63%
Fidelity Freedom K 2045 Fund (FFKGX) ER 0.64%
Fidelity Freedom K 2050 Fund (FFKHX) ER 0.65%
Fidelity Freedom K 2055 Fund (FDENX) ER 0.67%
Fidelity Freedom K Income Fund (FFKAX) ER 0.41%
Managed Income Portfolio II Class 2 ER 0.386%
PIMCO Total Return Inst CL (PTTRX) ER 0.46%


My wife has a 401K that’s with Caremark but another company bought which is Amerisource Bergen. Should she roll over to an IRA, go with new company 401K, or mixture of both.


5) If she is in the same job, but has a new 401k provider, she may not be allowed to roll her money to an IRA. She may have to leave it in the 401k. But she may be allowed to leave the old money with the old 401k provider. See what you find out about what her choices are. If she can leave the old money with the old 401k provider, we'll need the list of what is available from them too.

5) [color=#0000FF]5) She is allowed to leave old money and roll over to an IRA with the old 401K provider.

Old Provider Choices[color=#0000FF]

($16,736.77) Morley Financial Services, Inc
Principal Stable Value Pref Fund (ER 0.35%)
PIMCO Total Return Admin Fund PTRAX (ER 0.71%)
Vanguard Inflation-Protected Secs Inst Fund VIPIX (ER 0.07%)
Vanguard Total Bond Market Index Inst Plus Fund VBMPX (ER 0.05%)
Principal LifeTime Strategic Income Separate Account (ER 0.62%)
Principal LifeTime 2010 Separate Account (ER 0.69%)
Principal LifeTime 2020 Separate Account (ER 0.74%)
Principal LifeTime 2030 Separate Account (ER 0.76%)
Principal LifeTime 2040 Separate Account (ER 0.78%)
Principal LifeTime 2050 Separate Account (ER 0.79%)
Oakmark Equity & Income I Fund OAKBX (ER 0.77%)
LargeCap Growth Separate Account ( ER 0.71%)
Dodge & Cox Stock Fund DODGX - (ER 0.52%)
LargeCap S&P 500 Index Separate Account ( ER 0.06%)
SmallCap Value II Separate Account ( ER 1.27%)
MidCap S&P 400 Index Separate Account ( ER 0.18%)
SmallCap S&P 600 Index Separate Account (ER 0.31%)[/color][/color]
Vanguard Explorer Admiral Fund [1], [18], VEXRX (ER 0.34%)
Fidelity Diversified International Fund FDIVX ( ER 0.90%)
Vanguard Developed Markets Index Inst Plus Fund VDMPX (ER 0.06%)

6). You apparently both have jobs, but one is also involved with the military and has access to the TSP. What is the maximum amount you could put in the TSP each year? It is possible that putting the money into the TSP rather than either 401k is a better option, but the amount you put in the TSP will be limited by the military salary so we need to figure out how much can go into the TSP.

6) I don't like the TSP because they don't offer matching funds for active duty and there should be other quality funds out there.[color=#0000FF][/color]


I need guidance in choosing mutual funds that will earn me a better return.

There are really only a couple of things that you can do to have a better return. One is to keep your costs very low. The other one is to be able to predict the future. That's why we concentrate so much on keeping costs low. :D
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Re: Investment planning an 401K Rollover

Postby retiredjg » Wed May 30, 2012 10:38 am

investorQ wrote:6) I don't like the TSP because they don't offer matching funds for active duty and there should be other quality funds out there.

That's because you don't yet understand the TSP and the desirability of tax-deferred investing even without a match.

I'm assuming you (rather than your wife) is the person eligible for the TSP. Is that correct? How much can you contribute each year? $17k?
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Re: Investment planning an 401K Rollover

Postby retiredjg » Wed May 30, 2012 3:52 pm

This is what I think you have. You need to check this over carefully to be sure I have it right. Your posts are not entirely clear and you are using terms differently, so we need to get on the same page before we can make any progress from here.

Taxable Account at First Command $123,844
Fidelity Advisor Equity Growth Fund EPGAX $6,820.27(1.19%)
Invesco International Small Company Fund IEGAX $13,504.17 (1.58%)
Pioneer Independence Voluntary Fund PINDX $39,099.42(1.25%)
Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA (1.25%)
Pioneer Cullen Value Fund CVFCX $14,153.00 (1.18%)
Fidelity Advisor New Insights Fund FNIAX $11,848.91 (1.07%)
Fidelity Advisor Strategic Real Return F FSRAX $11,095.23 (1.03%)

His TSP
Not in use

His Roth IRA at First Command $41,476
Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA ER(1.25%)
Pioneer Cullen Value Fund CVFCX $14,153.00 ER(1.18%)

Her New 401k at Amerisource $1,065
Fidelity Freedom 2035 .63%

Her Old 401k at Caremark $14,000
some kind of fixed income fund


Her Hew 401k Choices (Amerisource)
AmerisourceBergen Corporation Stock Fund (ABC ) ER $.029/share
Allianz NFJ Dividend Value Inst CL (NFJEX) ER 0.71%
Fidelity Growth Company Fund (FDGRX) ER 0.84%
JP Morgan US Equity Instl CL (JMUEX) ER 0.66%
Spartan 500 Index Fund - Institutional Class (FXSIX) ER 0.66%
Fidelity Low-Priced Stock Fund (FLPSX) ER 0.83%
Munder Mid Cap Core Growth Fund Class Y (MGOYX) ER 1.08%
RS Value (RSVAX) ER 1.33%
American Funds EuroPacific Growth Fund Class R-5 (RERFX) ER 0.55%
Fidelity Freedom K 2000 Fund (FFKBX) ER 0.41%
Fidelity Freedom K 2005 Fund (FFKVX) ER 0.49%
Fidelity Freedom K 2010 Fund (FFKCX) ER 0.52%
Fidelity Freedom K 2015 Fund (FKVFX) ER 0.52%
Fidelity Freedom K 2020 Fund (FFKDX) ER 0.56%
Fidelity Freedom K 2025 Fund (FKTWX) ER 0.59%
Fidelity Freedom K 2030 Fund (FFKEX) ER 0.61%
Fidelity Freedom K 2035 Fund (FKTHX) ER 0.63%
Fidelity Freedom K 2040 Fund (FFKFX) ER 0.63%
Fidelity Freedom K 2045 Fund (FFKGX) ER 0.64%
Fidelity Freedom K 2050 Fund (FFKHX) ER 0.65%
Fidelity Freedom K 2055 Fund (FDENX) ER 0.67%
Fidelity Freedom K Income Fund (FFKAX) ER 0.41%
Managed Income Portfolio II Class 2 ER 0.386%
PIMCO Total Return Inst CL (PTTRX) ER 0.46%

Old 401k (Caremark) Choices
($16,736.77) Morley Financial Services, Inc
Principal Stable Value Pref Fund (ER 0.35%)
PIMCO Total Return Admin Fund PTRAX (ER 0.71%)
Vanguard Inflation-Protected Secs Inst Fund VIPIX (ER 0.07%)
Vanguard Total Bond Market Index Inst Plus Fund VBMPX (ER 0.05%)
Principal LifeTime Strategic Income Separate Account (ER 0.62%)
Principal LifeTime 2010 Separate Account (ER 0.69%)
Principal LifeTime 2020 Separate Account (ER 0.74%)
Principal LifeTime 2030 Separate Account (ER 0.76%)
Principal LifeTime 2040 Separate Account (ER 0.78%)
Principal LifeTime 2050 Separate Account (ER 0.79%)
Oakmark Equity & Income I Fund OAKBX (ER 0.77%)
LargeCap Growth Separate Account ( ER 0.71%)
Dodge & Cox Stock Fund DODGX - (ER 0.52%)
LargeCap S&P 500 Index Separate Account ( ER 0.06%)
SmallCap Value II Separate Account ( ER 1.27%)
MidCap S&P 400 Index Separate Account ( ER 0.18%)
SmallCap S&P 600 Index Separate Account (ER 0.31%)[/color][/color]
Vanguard Explorer Admiral Fund [1], [18], VEXRX (ER 0.34%)
Fidelity Diversified International Fund FDIVX ( ER 0.90%)
Vanguard Developed Markets Index Inst Plus Fund VDMPX (ER 0.06%)

1) What is $16,736.77? Is that how much she has in the old 401k? Or is the old 401k $14,000?

2) What is Morley Financial Services, Inc? I thought the old 401k is at Caremark.

3) How much money can the two of you together save for retirement each year?

4) How much money is needed to get the full match for Her 401k?

5) How much money are you allowed to put in the TSP each year?

6) If she rolls Her old 401k to an IRA, what funds are available and what are the expense ratios? What I'm trying to find out is whether the funds available in the old 401k are available in the IRA. And if so, what are the expense ratios? They may be different from the expense ratios in her old 401k.

I know this is a lot of questions, but we need the answer to all of them. :happy
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Re: Investment planning an 401K Rollover

Postby investorQ » Fri Feb 08, 2013 12:42 am

This is what I think you have. You need to check this over carefully to be sure I have it right. Your posts are not entirely clear and you are using terms differently, so we need to get on the same page before we can make any progress from here.

Taxable Account at First Command $123,844
Fidelity Advisor Equity Growth Fund EPGAX $6,820.27(1.19%)
Invesco International Small Company Fund IEGAX $13,504.17 (1.58%)
Pioneer Independence Voluntary Fund PINDX $39,099.42(1.25%)
Fidelity Advisor New Insights Fund FNIAX $11,848.91 (1.07%)
Fidelity Advisor Strategic Real Return F FSRAX $11,095.23 (1.03%)

His TSP
Not in use

His Roth IRA at First Command $41,476
Pioneer Independence Voluntary Fund PINDX $27,323.07 ROTH IRA ER(1.25%)
Pioneer Cullen Value Fund CVFCX $14,153.00 ER(1.18%)

Her New 401k at Amerisource $1,065
Fidelity Freedom 2035 .63%

Her Old 401k at Caremark $14,000
some kind of fixed income fund


Her Hew 401k Choices (Amerisource)
AmerisourceBergen Corporation Stock Fund (ABC ) ER $.029/share
Allianz NFJ Dividend Value Inst CL (NFJEX) ER 0.71%
Fidelity Growth Company Fund (FDGRX) ER 0.84%
JP Morgan US Equity Instl CL (JMUEX) ER 0.66%
Spartan 500 Index Fund - Institutional Class (FXSIX) ER 0.66%
Fidelity Low-Priced Stock Fund (FLPSX) ER 0.83%
Munder Mid Cap Core Growth Fund Class Y (MGOYX) ER 1.08%
RS Value (RSVAX) ER 1.33%
American Funds EuroPacific Growth Fund Class R-5 (RERFX) ER 0.55%
Fidelity Freedom K 2000 Fund (FFKBX) ER 0.41%
Fidelity Freedom K 2005 Fund (FFKVX) ER 0.49%
Fidelity Freedom K 2010 Fund (FFKCX) ER 0.52%
Fidelity Freedom K 2015 Fund (FKVFX) ER 0.52%
Fidelity Freedom K 2020 Fund (FFKDX) ER 0.56%
Fidelity Freedom K 2025 Fund (FKTWX) ER 0.59%
Fidelity Freedom K 2030 Fund (FFKEX) ER 0.61%
Fidelity Freedom K 2035 Fund (FKTHX) ER 0.63%
Fidelity Freedom K 2040 Fund (FFKFX) ER 0.63%
Fidelity Freedom K 2045 Fund (FFKGX) ER 0.64%
Fidelity Freedom K 2050 Fund (FFKHX) ER 0.65%
Fidelity Freedom K 2055 Fund (FDENX) ER 0.67%
Fidelity Freedom K Income Fund (FFKAX) ER 0.41%
Managed Income Portfolio II Class 2 ER 0.386%
PIMCO Total Return Inst CL (PTTRX) ER 0.46%

Old 401k (Caremark) Choices
($16,736.77) Morley Financial Services, Inc
Principal Stable Value Pref Fund (ER 0.35%)
PIMCO Total Return Admin Fund PTRAX (ER 0.71%)
Vanguard Inflation-Protected Secs Inst Fund VIPIX (ER 0.07%)
Vanguard Total Bond Market Index Inst Plus Fund VBMPX (ER 0.05%)
Principal LifeTime Strategic Income Separate Account (ER 0.62%)
Principal LifeTime 2010 Separate Account (ER 0.69%)
Principal LifeTime 2020 Separate Account (ER 0.74%)
Principal LifeTime 2030 Separate Account (ER 0.76%)
Principal LifeTime 2040 Separate Account (ER 0.78%)
Principal LifeTime 2050 Separate Account (ER 0.79%)
Oakmark Equity & Income I Fund OAKBX (ER 0.77%)
LargeCap Growth Separate Account ( ER 0.71%)
Dodge & Cox Stock Fund DODGX - (ER 0.52%)
LargeCap S&P 500 Index Separate Account ( ER 0.06%)
SmallCap Value II Separate Account ( ER 1.27%)
MidCap S&P 400 Index Separate Account ( ER 0.18%)
SmallCap S&P 600 Index Separate Account (ER 0.31%)[/color][/color]
Vanguard Explorer Admiral Fund [1], [18], VEXRX (ER 0.34%)
Fidelity Diversified International Fund FDIVX ( ER 0.90%)
Vanguard Developed Markets Index Inst Plus Fund VDMPX (ER 0.06%)

What is $16,736.77? It is how much she has in the old 401K

2) What is Morley Financial Services, Inc? Is the 401K plan administrator

3) How much money can the two of you together save for retirement each year? [color=#0080FF]I would $10,000 together
[/color]
4) How much money is needed to get the full match for Her 401k? My wife doesn't work for the company any longer

5) How much money are you allowed to put in the TSP each year? $17,500

6) If she rolls Her old 401k to an IRA, what funds are available and what are the expense ratios? What I'm trying to find out is whether the funds available in the old 401k are available in the IRA. And if so, what are the expense ratios? They may be different from the expense ratios in her old 401k.

Old 401k (Caremark) Choices($16,736.77)
Principal Stable Value Pref Fund (ER 0.35%)
PIMCO Total Return Admin Fund PTRAX (ER 0.71%)
Vanguar d Inflation-Protected Secs Inst Fund VIPIX (ER 0.07%)
Vanguard Total Bond Market Index Inst Plus Fund VBMPX (ER 0.05%)
Principal LifeTime Strategic Income Separate Account (ER 0.62%)
Principal LifeTime 2010 Separate Account (ER 0.69%)
Principal LifeTime 2020 Separate Account (ER 0.74%)
Principal LifeTime 2030 Separate Account (ER 0.76%)
Principal LifeTime 2040 Separate Account (ER 0.78%)
Principal LifeTime 2050 Separate Account (ER 0.79%)
Oakmark Equity & Income I Fund OAKBX (ER 0.77%)
LargeCap Growth Separate Account ( ER 0.71%)
Dodge & Cox Stock Fund DODGX - (ER 0.52%)
LargeCap S&P 500 Index Separate Account ( ER 0.06%)
SmallCap Value II Separate Account ( ER 1.27%)
MidCap S&P 400 Index Separate Account ( ER 0.18%)
SmallCap S&P 600 Index Separate Account (ER 0.31%)
[/color]
Vanguard Explorer Admiral Fund [1], [18], VEXRX (ER 0.34%)
Fidelity Diversified International Fund FDIVX ( ER 0.90%)
Vanguard Developed Markets Index Inst Plus Fund VDMPX (ER 0.06%)[/color]

I know this is a lot of questions, but we need the answer to all of them.

I hope I answered all the questions I needed to clarify.

I really am interested in the TSP now. Do you know if I could roll my wife's 401K in my new TSP account? Should roll any of my account into the new TSP if allowed too?

My wife has to a make decision weather to withdraw the money from her 401K or roll it over somewhere else? Please give me some options for her 401K.
investorQ
 
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Re: Investment planning an 401K Rollover

Postby retiredjg » Fri Feb 08, 2013 4:39 pm

I think I'm closer to understanding what you have. Unfortunately, you can't roll Her Old 401k into His TSP. Money that goes into a 401k, 403b, TSP, IRA, Roth IRA, etc. must stay in the name of the original person (at least while living).

You have quite a large taxable account at First Command (5 different funds that total about $82,368). What is the purpose of this money? If it is for a house down payment or some other short term goal, it should be invested one way. If it is part of your retirement nest egg, it should be invested another way. Whatever the goal is for this money, I think you could greatly improve your choices of the funds that it is invested in.

Your current choices have two problems:

    -High expense ratios (you already know that part)

    -The are not tax efficient (meaning you are paying more in taxes than necessary)
Even though this account is not the question you are most interested in, you need to give some thought to selling what you have in this account and reinvesting it better (either Fidelity or Vanguard would be a good choice). If you are really in the 15% tax bracket, any long term gains you have on these funds would be taxed at 0%, but only up to the top of the 15% bracket. Any long term gains above that would be taxed at 15%. Your short term gains would be taxed at 25%. Nevertheless, it would be better to pay the taxes now and get headed in the right direction than to leave that money invested in those funds for many years.

What are your thoughts on that?

I would also roll/transfer His Roth IRA at First Command over to either Fidelity or Vanguard. There may be an account closing fee at First Command to do this. But I don't see any reason to stay at First Command, do you?

For Her 401k (a combination of the old Caremark plan and the newer Amerisource plan), I think you should roll that over to a traditional IRA (not Roth) at either Fidelity or Vanguard. If she wants to invest in a target type of fund, I'd suggest going to Vanguard as their target funds are considerably lower expense than at Fidelity. If she wishes to use individual funds instead of a target type fund, either Fido or Vanguard would be a good choice.

Right now, you are a lot more aggressive and risky than your desired 60/40 ratio.

If you contribute the whole $10k you expect to save this year to the TSP, you will lower your taxable income by $10k. That will give you more space in the 15% bracket for selling the funds in your taxable account without paying tax.

To check to see just how close you are to the top of the 15% bracket, compare your taxable income (line 43 on Form 1040) to this chart.\

We can talk more about what funds to invest in once you post what your plans are for the taxable account (your goal for that money and if you plan to move it to Fidelity or Vanguard).
retiredjg
 
Posts: 17159
Joined: Thu Jan 10, 2008 1:56 pm

Re: Investment planning an 401K Rollover

Postby investorQ » Sat Feb 09, 2013 9:37 pm

You have quite a large taxable account at First Command (5 different funds that total about $82,368). What is the purpose of this money? If it is for a house down payment or some other short term goal, it should be invested one way. If it is part of your retirement nest egg, it should be invested another way. Whatever the goal is for this money, I think you could greatly improve your choices of the funds that it is invested in.

The purpose for those accounts were to give me a jump start on starting up a business but $82,368 is a small dent. I may need to have access to it in another 5 yrs. Do you know of any investments where I make 10 to 12% compounded on that $82,368?

[color=#0000BF]Do you give advice in individual stocks, any other investment vehicle or just mutual funds/retirement savings?[/color]

Even though this account is not the question you are most interested in, you need to give some thought to selling what you have in this account and reinvesting it better (either Fidelity or Vanguard would be a good choice). If you are really in the 15% tax bracket, any long term gains you have on these funds would be taxed at 0%, but only up to the top of the 15% bracket. Any long term gains above that would be taxed at 15%. Your short term gains would be taxed at 25%. Nevertheless, it would be better to pay the taxes now and get headed in the right direction than to leave that money invested in those funds for many years.

What are your thoughts on that?
[color=#0000BF][/color]Yes I have been ready to leave First Command and with a little bit guidance I will this year. I didn't really know what my tax situation would be and any penalties that would be involved. I understand that I can get better returns elsewhere.
investorQ
 
Posts: 6
Joined: Sat May 12, 2012 11:12 pm

Re: Investment planning an 401K Rollover

Postby retiredjg » Sun Feb 10, 2013 12:53 pm

investorQ wrote: Do you know of any investments where I make 10 to 12% compounded on that $82,368?

No. Stocks (in general) may return 3% or 15% or -10% over the next few years. There is no way to predict what the stock market will do.


Do you give advice in individual stocks, any other investment vehicle or just mutual funds/retirement savings?

I'd say that most folks here do not recommend much in the way of individual stocks. A small portion of your portfolio, maybe.

If you are looking for someone to help you pick a stock or two that will grow that money to start a business, you probably will not get many takers. Individual stocks carry a lot of risk. You could easily lose all your money.


I didn't really know what my tax situation would be and any penalties that would be involved.

There should not be any penalties involved.
retiredjg
 
Posts: 17159
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Re: Investment planning an 401K Rollover

Postby retiredjg » Sun Feb 10, 2013 1:29 pm

Since the money in the taxable account is not for retirement, it should not be included in the retirement portfolio. That leaves you with something like this which you have set aside for retirement:

    His TSP 0%

    Her Rollover IRA $18k (guess/estimate)

    His Roth IRA $42k (guess/estimate)

The easiest thing to do is simply fill each of these accounts with a target type fund which is near your desired stock to bond ratio of 60% stocks and 40% bonds. In the IRAs, that would be Vanguard Target Retirement 2020 ( 64% stock, 36% bonds) and in the TSP that would be Lifecycle 2020 (54% stock, 46% bonds). That gets you in the ball park. It could be finer tuned if you want to fiddle with it.

If you wish to use Target funds, Vanguard is definitely superior to Fidelity. If you want to move your money to Fidelity instead, you'd want to use a handful of their excellent Spartan funds to build your portfolio using individual funds.

As for the $82,368 in your taxable account, if you invest that aggressively in stocks (individual or in mutual funds or ETFs), you might make some money or it might take a big dive in the next crash. You'll have to figure out how much risk you are willing to take before you can know how to invest it.

If the amount you have now is just a small dent in what you need for a business, you may have to reconsider whether you should get a loan or a business partner or whatever. It's possible you could get lucky and "make a killing" in the market and have the money for your business. It is more likely that you will not get that lucky. You might even lose every bit of it.

If you decide you want to fold that money into your retirement portfolio, there are several approaches you could take and you could use either Vanguard or Fidelity depending on your preferences.
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