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Financial Planning / Foolish 401(k)s


Subject:  Re: Self directed IRA's Date:  2/2/1999  12:48 AM
Author:  TMFMax Number:  803 of 26142

<<I left a job 2 years ago in which I had a 401k account at the Principal Financial
Group. I have been very disappointed with my accounts performance.
I have an account at Datek online. Very happy with this online broker. Trying to
make sure I understand the steps I need to take.
If I open a self directed IRA with Datek can I then:
1. Buy and sell stock in individual companies in the same way that I do with my
regular brokerage account?
2. This would of course be funded with the money I would rollover from the
Principal Financial Group. After opening account would I then contact the
Principal and request that my funds be transfered?
3. Lets say $25k gets rolled into my new Datek account. I could then invest in
companies or funds of my choosing. Only being able to add the $2000 for my
wife and I on a yearly basis?
4. If I open this account can I also open a Roth account with Datek and put
$2000 apiece in it for this tax year?
Thanks in advance for any help on this?>>


Yes, I think you've got everything right here. As to contacting Principal, I'm not even sure you have to do that, Datek should be able to send you a rolloever kit which may include all the paperwork necessary -- it really may depend on your plan. Contact Datek for the rollover kit, and you'll find out.

You are correct -- the rollover of 401k to an IRA will not affect your ability to make your $2000 Roth IRA contribution for this year.

In short, I think you've got everything correct.

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