you might want to consider: if you had an emergency or a situation where you absolutely had to tap into those funds, which could you access faster? also, which would cause you less penalty/tax for using them? are there age requirements for withdrawal w/o penalty? is the IRA rate steady? you may be able to move funds around, within the 401(k) program, that will let you earn more, but with higher risk, etc.

i'm exploring similar options with my 457(b) funds from my previous employer... since i no longer work there, i have a few more options. i could take the money and run (and get 1099'ed on it at the end of the year), but for now, i'm letting it sit and earn. since i have a full pension from that employer in addition to these funds, i'm not super worried about squandering retirement monies. eventually i'll either roll it into an IRA or into my retirement program here, or quite possibly use some of it so i have 20% to put down on a new home. that all depends upon how the house sale goes...

it certainly can't hurt to shop around and explore your options. would you have to move *all* of it? perhaps you could do both?

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That's true, but I've got money being stuffed away somewhere else which would provide me faster access. I do need to look into all of that... IRAs are not steady, my understanding of them is that they are a whole lot like a 401(k), except it's not done through one's employer. I wouldn't get any sort of matching either, but EDS only matches something like 5% of the first 5% you put in, and then that's only in company stock, which is mostly sliding backwards.

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That answers my question.

Put in 5%, then put the rest into an IRA. Even if the match loses some value, it's still free money and will add up overtime.

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my concern is that the 5% of 5% isn't worth keeping, if a financial guy could do me better with the lot of the money. There's also rather limited options, and I'd have to regularly adjust things myself.

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so max the IRA contribution then put the rest in the 401K :P

Are you currently saving more than 4K a year?

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Hmm, in 401(k), I think so, yeah...

Maybe I should roll my current 401(k) to an IRA, and then keep contributing to get matching, then periodically move some out of the 401(k)? I think the way it works is that I can't move the portion which was matched, that has to stay there...

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Our 401K offers some nice midcap and overseas market funds that have been rocking as of late, I'm getting like a 12% return on mine (minus the Lockmart stock I get as a match which has been doing good because peace apparently, doesn't sell)

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12%!? nice (:

i just looked mine up, because i was curious...

Your return for the quarter: 1.18%
Your trailing 12-month return: 4.86%

with the biggest growth being seen in the largecap/higher risk stuff. overall it's not bad, considering there's no matching or stock (municipal employee system).

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Does your company match a percentage of what you put into your 401k? If they do, you might need to leave it in the 401k to ensure you get that amount.

I need to roll les' 401ks into an IRA. I'm pretty conservative when it comes to money (ie I want to put it somewhere pretty safe wehre there isn't a lot of risk- although I'd be willing to put some of it into high risk of the pay out sounded pretty solid). Do you know how high risk this guy is?

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I'm not sure, but the story I was told by my friend is that both he, his dad, and his grandpa (before he died) had used him, and even though 2001 - 2002 they did not have a negative year.

I still need to look into all of that...

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yeah, if i hopped jobs i'd totally roll the old 401ks into an IRA

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Financial advisors/investment consultants are only really worth it if you're constantly making changes to your portfolio. I've managed to get all the advice I've needed from my stockbroker, and that comes with the commission I'd pay no matter what. The same should apply for your IRA 401K rep. If you've got a ton of diverse investments and want to fundamentally rearrange it (IE sell a _lot_) without getting stabbed in the face by the IRS, it's worth a consultancy, but having a full-time financial advisor is multimillionaire territory. Any competent investment banker can switch you in to an IRA without tax effects or fancy juggling, doesn't take a professional personal finance consultant.

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I'd say keep the 401(k) if either of the two apply:

* You save more per year than the IRA contribution limit (I do)
* Your company provides any match at all (Mine Does)

I max the 401(k) to get the company match and then after i've matched my 401(k) - to the extent i get free money from Lockheed - I contribute to the IRA.

If you don't get a match, it may be worth it to max the IRA contribution and then put the excess into the 401(k)

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Well, as you mentioned in a previous reply, you don't want to lose that matching contribution from your company. Also, how much of that money is vested? If you're not at 100%, then you'll lose whatever percentage of the company match is left.

What my financial guy did for me was set up a regular IRA, and when I change jobs, I roll my 401k money from the job I left into that IRA, then start up again with a new 401k at the new job... repeat as needed.

If you want to contribute to an IRA outside of your 401k, open a Roth IRA. Your contributions are post-tax, but when you go to pull the money out, it's all yours, none of it is taxed. Roth IRA = Teh Schizznit!

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As others have pointed out, the main advantage of the 401K is that the maximum contribution is much higher. I think 401Ks now max out at around $13,000 per year, and IRAs max out at $4000.

Also, then you get into Roth IRA vs. traditional, and the advantages/disadvantages of each. Contributions to a Roth IRA are not tax-deductible when you make them, but earnings grow tax deferred and can be withdrawn tax-free in retirement. A traditional IRA *can* be tax-deductible (as, essentially, a 401K is - putting money into the 401K essentially reduces your income automatically for tax purposes).

Oh, and you can't get a Roth IRA if you make more than a certain amount (somewhere around 100K for a single person).

The real answer is: seek advice from a financial planner to see how you want to financially plan. Ideally, your planner is not someone working directly for a firm holding the funds you might invest in, but even then you can trust their opinion for general strategies, if not neccesarily for the vehicles you might use to invest in.

I'd say maybe you do both. Drop the 401K contributions by $4000, put that into a Roth IRA with this new guy, and then when/if you change jobs, do the cashout/rollover of the 401K then (I don't know if you can roll over the 401K as is and then continue to invest in it -- somehow I don't think so, but you can certainly rollover when you leave).

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I'm only 1/2 kidding here, but...


Fuck tax defered retirement plans. 401k and IRA are better than nothing, true. BUT... You get anally raped if you need to withdrawl that money before the age of retirement. Where do you think the age of retirement will be when you decided to retire? Right now it is 59 1/2. That can easily be changed by future legislation. I won't be 60 for over 30 years still. I expect that 59.5 age will raise to closer to 70.

Fuck that. I want to retire when I'm 40. I don't want to pay taxes and a 10% penalty for early withdrawl. (yes, on Roth, you DO pay taxes on interest earnings if you withdrawl early)

What is even worse, lets say the retirement age stays the same. After a certain age you are FORCED to withdrawl. That means you could still be working a full time job, probably making the best money of your life (older people tend to make high salary due to their experience and/or many years with a company). And you would be FORCED to withdrawl from your retirement account and pay taxes on those withdrawls.(cept for maybe Roth IRA - although the fine print may say something about maximum earnings for an individual, and roth withdrawls may effect your income level, so even though the Roth income isn't taxed, it puts all your other income in a higher tax braket)

The point is, forced withdrawl means you loose the power of compound interest. Your money can't grow like it was, because you are forced to shrink that pool of funds.

So if you REALLY want your money to work for you, just keep it to yourself.

12% is cute and all, but I can get 10% just via Dividends by owning a premier UK power company, United Utilities (UU). Those dividends are paid anually (not quarterly like US stocks), but if DRIPed, then they can easily average over a 12% anual return over a period of 7+ years. Suddenly 12% doesn't seem so high.

Finally, the other advantage to keeping all your money to yourself and out of IRA/ERISA programs is that you will have lots of cash on hand to buy houses. Slumlords do get rich. Trade in 4 houses and buy a hotel, just like monopoly. Hell, you could buy the Ramanda. I hear Mike Higgins's health is not good.

Yes, I've read too much Robert Kiyosaki.

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i have to agree with some of the posts here... keep the 401k for the simple fact that there is company matching. free money is free money, after all. absolutely contribute the max to your IRA (i'm assuming you have a roth, if not... you should) and then contribute whatever you feel like to your 401k. just keep getting that company contribution.

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