Quote:
Originally Posted by Schneed10
His options are:
1) Let it sit right where it is until he's ready to use it. Pro: he doesn't have to worry about it now, and he can always move it whenever he's ready. Con: He can't change the investments within the 401K.
2) Roll it over into an IRA. This is the best option in my opinion. He can roll it over into the IRA and continue to let it just sit there if he wishes. Or he can make changes to the investments held within the IRA. Or he can even begin withdrawing funds to use (he needs to be at least 59 and a half years old to avoid costly penalties).
When talking to the bank, keep this in mind:
They're going to give him lots of great options, but all of those options will be with THAT bank. Just about all the options the bank presents will also be available through Fidelity, Vanguard, Liberty Mutual, and all kinds of other financial companies. My advice: talk to the bank and find out the options. But ultimately, roll the funds into an IRA with Fidelity or Vanguard. Their funds have the lowest expense ratios in the entire business.
I personally don't like investing in annuities, they do guarantee an income stream, but fees can be costly. And I like to manage my own investments. But if you're willing to pay the fees, an annuity and it's steady income stream can give peace of mind. To each his own. (if your Dad isn't ready to start using the cash yet, then DEFINITELY don't get an annuity until he's ready to start using the money).
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Sounds like very good info, my dad has banked at this bank for the past 42 years. And he is very old school in his ways, so being that he would be stuck at that bank to him would be better than going to fidelity or somewhere else. I am trying very hard to break him of that train of thought, but he is very, very stubborn.
When I say that my dad is old school, I mean he will not up grade his checking account to a free intrest checking account. Because they offer only 0.5%, but I tried to tell him that it will not cost you anything and the ammount that you have in there you will be getting free money from it. But no he just wont do it...