Setting up 300k Ira. ..

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Zonk63
Posts: 15
Joined: Thu Jun 14, 2018 10:46 am

Setting up 300k Ira. ..

Post by Zonk63 » Thu Jun 14, 2018 10:56 am

I am 55 yrs old and looking to rollover to an ira. So far the suggestions have been.... stocks with dividends, or ETFS alongside a variable annnuity. I don't think I like the VA option. I have NONE experience in investing. Looking for firms . Charles shwabb is one I have contacted so far. Any advise is appreciated.

chevca
Posts: 1906
Joined: Wed Jul 26, 2017 11:22 am

Re: Setting up 300k Ira. ..

Post by chevca » Thu Jun 14, 2018 11:09 am

How was the IRA set up or invested before the roll over? Is this an inherited IRA?

Here's a good read and something to think about... viewtopic.php?f=10&t=88005

Tough to go wrong with a three fund portfolio. You can do it all yourself too. Not paying someone fees to run your IRA means you keep more of your money. :happy

Zonk63
Posts: 15
Joined: Thu Jun 14, 2018 10:46 am

Re: Setting up 300k Ira. ..

Post by Zonk63 » Thu Jun 14, 2018 11:16 am

Rolling over from retirement plan to an ira

soccerrules
Posts: 803
Joined: Mon Nov 14, 2016 4:01 pm

Re: Setting up 300k Ira. ..

Post by soccerrules » Thu Jun 14, 2018 11:19 am

welcome to the forum and congrats on your 1st post.

In general the more information you provide the better the answers will be. Your question is fairly straight forward but it also raises a few questions.

1) Is this a 401K/403B account with current/former employer ? -- many times you can leave it there if your costs are low. Rolling it out to Schwab, Vanguard and Fidelty is also an option. Rolling a past 401k/403B to you new employer is also an option (if allowed by new employer)
2) Do you have Roth IRA and/or plan to have a Roth IRA and make future contributions ? If your income is to high according to IRS rules to make a direct contribution to an Roth IRA and you must use the Backdoor method (Contribute to non-deductible Trad IRA then move to Roth IRA) to contribute to a Roth IRA , be aware of the pro rata rule with having a Traditional IRA's when using backdoor Roth method.
3) What is your desired AA ? - Stocks and Bonds are good. I would probably steer away from an Annuity, but they can be useful under the right circumstances. (not sure that applies to you or not -- not sufficient info)

If you feel like you don't have experience in investing yet, than I would suggest not doing anything for the next 30 days and spending time educating yourself and creating a plan. Read the wikis, getting started video, a few of the basic recommended books and browse the forum. YOU need to understand why you are making the moves that might be suggested by multiple posters. Knowledge is power.

best of luck
Don't let your outflow exceed your income or your upkeep will be your downfall.

chevca
Posts: 1906
Joined: Wed Jul 26, 2017 11:22 am

Re: Setting up 300k Ira. ..

Post by chevca » Thu Jun 14, 2018 11:22 am

I agree with doing nothing until you are comfortable with a plan you will stick with. Leave it where it is for a while, if you can. Or, stick it all in a money market fund or similar in the new IRA until you know.

Elbowman
Posts: 491
Joined: Tue Apr 03, 2012 2:25 pm

Re: Setting up 300k Ira. ..

Post by Elbowman » Thu Jun 14, 2018 11:35 am

Zonk63 wrote:
Thu Jun 14, 2018 10:56 am
So far the suggestions have been.... stocks with dividends
Meh.
Zonk63 wrote:
Thu Jun 14, 2018 10:56 am
variable annnuity
Definitely not.

So, other people have said you should take time to educate yourself, and yes, that's true. Also, we really do need the whole picture (this format) to give the best advice. But at the end of the day, the gold standard really is rolling to a Vanguard IRA, and putting everything into a Target Retirement Fund. You ought to have a good reason why your situation is special to do anything else.

Zonk63
Posts: 15
Joined: Thu Jun 14, 2018 10:46 am

Re: Setting up 300k Ira. ..

Post by Zonk63 » Thu Jun 14, 2018 12:25 pm

Here's more info for you guys. I just turned 55 and have been planning on rolling out of the company profit sHaring plan and into an ira as soon as I am able. Turning 55 is the threshold. May be leaving job soon and wanted this done beforehand . The main goal here is to have everything taken care of for my wife so that she doesn't have to mess with my present employer. Second thought is that I may have to rely on a portion of this for income for a year or two. No more than 20k tops. Could most likely do it without , but just in case. Last but not least, I want the ease of mind that it is available if needed. Current situation, it isnt. I want steady growth with little to fair amount of risks. That's me in a nutshell
....

international001
Posts: 439
Joined: Thu Feb 15, 2018 7:31 pm

Re: Setting up 300k Ira. ..

Post by international001 » Thu Jun 14, 2018 12:30 pm

chevca wrote:
Thu Jun 14, 2018 11:22 am
I agree with doing nothing until you are comfortable with a plan you will stick with. Leave it where it is for a while, if you can. Or, stick it all in a money market fund or similar in the new IRA until you know.
Nooooo.. time is money

Default option should be always target fund for the age you want to retire (meaning start distributions from your IRA). You can decrease the year if you feel more conservative or increase it if you feel more aggressive

Zonk63
Posts: 15
Joined: Thu Jun 14, 2018 10:46 am

Re: Setting up 300k Ira. ..

Post by Zonk63 » Thu Jun 14, 2018 12:57 pm

My delima...... it seems target date fund are too conservative, ETFS have to many fees, nobody like annuties. Maybe I should pick a good advisor. Charles shwabb, amertrade. What would be recommedations on fees. 0.90 down to 0.50. ?? At 0.90 that would be roughly 3 grand. Is that to much in today's terms. ?

international001
Posts: 439
Joined: Thu Feb 15, 2018 7:31 pm

Re: Setting up 300k Ira. ..

Post by international001 » Thu Jun 14, 2018 1:32 pm

Zonk63 wrote:
Thu Jun 14, 2018 12:57 pm
My delima...... it seems target date fund are too conservative, ETFS have to many fees, nobody like annuties. Maybe I should pick a good advisor. Charles shwabb, amertrade. What would be recommedations on fees. 0.90 down to 0.50. ?? At 0.90 that would be roughly 3 grand. Is that to much in today's terms. ?
??

Target funds are as conservative or aggressive as you want to make them. The higher the year (of retirement), the more aggressive

delamer
Posts: 6127
Joined: Tue Feb 08, 2011 6:13 pm

Re: Setting up 300k Ira. ..

Post by delamer » Thu Jun 14, 2018 1:56 pm

Zonk63 wrote:
Thu Jun 14, 2018 12:57 pm
My delima...... it seems target date fund are too conservative, ETFS have to many fees, nobody like annuties. Maybe I should pick a good advisor. Charles shwabb, amertrade. What would be recommedations on fees. 0.90 down to 0.50. ?? At 0.90 that would be roughly 3 grand. Is that to much in today's terms. ?

First you say you want steady growth (by the way, there is no such thing) and low to fair risk, then you say target date funds are too conservative.

But target date funds can be low risk or high risk; you decide what you are comfortable with in terms of risk and choose accordingly.

And ETFs don’t have “too many fees” if you pick the right one.

My suggestion is that you educate yourself some more on investing. Look at the Suggested Reading page in this website and get one of the basic books.

If you feel that you need an advisor in the meantime, contact Vanguard about their PAS: https://investor.vanguard.com/financial ... visor-fees

Their fee is only 0.3%.

22twain
Posts: 1521
Joined: Thu May 10, 2012 5:42 pm

Re: Setting up 300k Ira. ..

Post by 22twain » Thu Jun 14, 2018 2:07 pm

Zonk63 wrote:
Thu Jun 14, 2018 12:57 pm
ETFS have to many fees
Vanguard Total Stock Market ETF has an expense ratio of 0.04%, and no transaction fees if you hold it at Vanguard. That's $120 per year on your $300K. That's about as low as you can get except maybe for a basket of individual stocks (which have no expense ratio) if you can find a brokerage with enough free trades. But individual stocks have a lot more risk.
My investing princiPLEs do not include absolutely preserving princiPAL.

Zonk63
Posts: 15
Joined: Thu Jun 14, 2018 10:46 am

Re: Setting up 300k Ira. ..

Post by Zonk63 » Thu Jun 14, 2018 2:15 pm

delamer wrote:
Thu Jun 14, 2018 1:56 pm
Zonk63 wrote:
Thu Jun 14, 2018 12:57 pm
My delima...... it seems target date fund are too conservative, ETFS have to many fees, nobody like annuties. Maybe I should pick a good advisor. Charles shwabb, amertrade. What would be recommedations on fees. 0.90 down to 0.50. ?? At 0.90 that would be roughly 3 grand. Is that to much in today's terms. ?

First you say you want steady growth (by the way, there is no such thing) and low to fair risk, then you say target date funds are too conservative.

But target date funds can be low risk or high risk; you decide what you are comfortable with in terms of risk and choose accordingly.

And ETFs don’t have “too many fees” if you pick the right one.

My suggestion is that you educate yourself some more on investing. Look at the Suggested Reading page in this website and get one of the basic books.

If you feel that you need an advisor in the meantime, contact Vanguard about their PAS: https://investor.vanguard.com/financial ... visor-fees

Their fee is only 0.3%.
I am sorry, that didn't read the way.I wanted. What I meant was, these are the things I have heard over the last month. I am actually leaning towards etf more than anything. Also , I am reading nightly trying to educate myself, another reason why I am on this site. Appreciate any and all. Thanks

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BL
Posts: 8272
Joined: Sun Mar 01, 2009 2:28 pm

Re: Setting up 300k Ira. ..

Post by BL » Thu Jun 14, 2018 2:37 pm

Agree that if adviser is desired, Vanguard PAS (0.3%/yr AUM) should be checked out. They will tell you exactly what they suggest, may have a bit of flexibility, are easy to quit, and won't lead you astray like some advisors salespeople might do by selling you high-cost funds or other products that benefits them, but not necessarily you. After looking at their suggestion, maybe asking opinions here, you can take or reject it. One of the most important decisions is deciding what % bonds/fixed income you want (AA).

Agree that a Target date fund (get one with the preferred bond %) is a simple, low-ER, well-balanced choice. Vanguard has several other good, low-ER single fund choices such as Life Strategy (4 choices), Balanced, Wellesley (active), or Wellington (active and more aggressive).

You could even do something like x% Total Stock Market, y% CDs (yes, Vanguard sells CDs, as do on-line banks and credit unions.)

You could delay SS in order to get a higher COLA-enhanced SS annuity for life (for highest earner if a couple). Spend down other savings to pay for it.

You could buy (preferable age 70+) a SPIA (single premium immediate annuity) to cover base expenses for life. (Not inflation adjusted so dollars would be worth less in future.)

Besides reading the Wiki here, consider a couple books such as the Boglehead ones or Jane Bryant Quinn's How to make your Money Last. Your library or bookstore (there is an Amazon link here) would have them. Here is a quick, in a nutshell review of key info:
https://www.etf.com/docs/IfYouCan.pdf

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