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Author: kayjackson Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76384  
Subject: new job/new retirement plan Date: 8/15/1999 3:05 PM
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Am moving to a new employer. She offers an employer paid 10% of my salary in a SEP through Merrill Lynch. I have the opportunity to add an additional 5% of my salary to it (which I plan to do). The employer paid portion is deposited quarterly. If there is the opportunity to self-direct to stocks, would I allow quarterly payments to build in a cash account before distributing the entire year's amount across the Foolish Four once yearly (Dec or Jan)? Or should I establish four different portfolios that need to be revised at four different times each year. I lean toward letting it build up to avoid what I'm afraid would be huge commissions at Lynch.
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Author: zgriner Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13161 of 76384
Subject: Re: new job/new retirement plan Date: 8/15/1999 6:02 PM
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I lean toward letting it build up to avoid what I'm afraid would be huge commissions at Lynch.

I would be afraid of the same. Perhaps you need to find out what the commission schedule is and see what the cheapest way you have to save the money. Unfortunately, since your SEP is at a full-service brokerage, they'll probably get you going & coming.

I realize that you will be a new employee, at some time in the future, see about asking your employer to move the SEP to a less expensive sponsor.

Zev

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Author: zay34kc3 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13164 of 76384
Subject: Re: new job/new retirement plan Date: 8/16/1999 12:35 AM
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I would be afraid of the same. Perhaps you need to find out what the commission schedule is and see what the cheapest way you have to save the money. Unfortunately, since your SEP is at a full-service brokerage, they'll probably get you going & coming.

my company used to have an SEP with ML. the minimum commission was $50, and it went up from there based on amount. ML was also not very forthcoming with the fee schedule. "Oh, it's about 3-4%," is the best answer i ever got. i also had to catch someone at the office who could actually execute trades for me. and, yes, i mean catch.

as to the original poster's question, i would suggest developing one portfolio. having 4 separate ones will kill you on commissions since you'd be making 4 times as many transactions. assuming you did a complete swap of the FF each time (8 trades), that's 32 trades/year, or $1600 minimum if your schedule is anything like mine was.

of course, if your salary/portfolio is high enough, that may not be much. also, ML is going to bring flat-fee trading (at $29.95/trade, i believe) to the masses in December. this may save you quite a bit of money and influence how you want to structure your account if your plan offers it.

zay34kc3

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Author: zay34kc3 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13166 of 76384
Subject: Re: new job/new retirement plan Date: 8/16/1999 12:43 AM
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If there is the opportunity to self-direct to stocks, would I allow quarterly payments to build in a cash account before distributing the entire year's amount across the Foolish Four once yearly (Dec or Jan)? Or should I establish four different portfolios that need to be revised at four different times each year. I lean toward letting it build up to avoid what I'm afraid would be huge commissions at Lynch.

quick follow-up to my first reply:

i think you would be better to just have one portfolio. park the cash in a money market fund until you have enough to reduce the commissions to a small percentage of your overall portfolio. if you need more than a few years to build up enough, you might look at some other funds that can provide a better return, but be very careful. in my old SEP with ML, every fund was a class B fund. they have "deferred sales charges" that decline from 4% to 0% over 4 years. if you need that money after 2 years, you still pay a fee.

zay34kc3

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