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Author: callearino Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Paychex Securities Corporation Date: 10/23/2006 4:41 PM
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Hello to all,

Our company started a 401(k) Profit sharing a couple of years before closing it's doors 2.5 years ago. We had been investing in Fidelity Advisor Balanced T, Equity T and Overseas T, however, it has sat inactive for two years. I'm 72 and been out of the USA for two years on my return I see we had an Employee Distribution activity 15, May 2006 that pulled $12,000 out of the Plan. The way it was set up so far I'm unable to get any answers except that they will send me the forms to transfer out of Paychec and Fidelity which I would like to do.

My wife and I are living off Social security and income from two commercial properties. We are starting a new business and planning on going at it for the next 8 years before we take that big cruise she wants.

Should I put this $30,000 thats left into an ira, annuity or ???

anything forthcoming will be appreciated. Starting over is fun.



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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54090 of 76418
Subject: Re: Paychex Securities Corporation Date: 10/23/2006 8:11 PM
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I'm 72 and been out of the USA for two years on my return I see we had an Employee Distribution activity 15, May 2006 that pulled $12,000 out of the Plan. The way it was set up so far I'm unable to get any answers except that they will send me the forms to transfer out of Paychec and Fidelity which I would like to do.

If you are 72 now, and you have not been in contact with your 401(k) administrator for 2 years because you were out of the country, you need to find out if the Employee Distribution Activity was due to the administrator realizing that you needed to have a Required Minimum Distribution (RMD) taken out. Those are supposed to start the year that you turn 70 1/2. If you do not take the RMD out, you will end up paying a big chunk of it to the IRS as a penalty.

AJ

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Author: callearino Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54092 of 76418
Subject: Re: Paychex Securities Corporation Date: 10/24/2006 1:33 AM
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AJ
Thanks, I'll check with my CPA to see if thats in fact what happened. the funds were removed 15 May one month after we returned.

From what I understand putting the balance into an IRA would be a good step?

KA

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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54098 of 76418
Subject: Re: Paychex Securities Corporation Date: 10/24/2006 10:46 AM
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...I'm 72.... We are starting a new business and planning on going at it for the next 8 years before we take that big cruise she wants.....

If it is within your means, take the cruise first, even if you are in good health now, the odds are against you both being alive and in good enough health to take a big cruise in eight years.

When my parents were around 70 they took the cruise where they move the ship from the Caribbean to the Mediterranean when the seasons change. It went through the Caribbean, down the coast of South America, across the Atlanta, up the cost of Africa, and into the Mediterranean. During the Atlantic crossing my Dad broke his arm so they spent a lot of time in the infirmary and got to see behind the scenes some. Much to their surprise at least three people (and they suspect several more) died during the cruise of things related to age like heart attacks. Apparently this was routine because a lot of people wait until they are too old to travel.

...Should I put this $30,000 thats left into an ira, annuity or ???...

Peoples situations vary a lot, but the generic vanilla answer would be to roll it into and IRA if you can, and to put it into one of the low cost targeted retirement income accounts like the Fidelity Freedom Income fund(FFFAX). Annuities are almost always a bad choice because of the high fees, commissions, and low returns, which is why salespeople love to sell them. Ask if you need recomendations of books to read about retirment investing.

Greg


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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54099 of 76418
Subject: Re: Paychex Securities Corporation Date: 10/24/2006 10:47 AM
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Thanks, I'll check with my CPA to see if thats in fact what happened. the funds were removed 15 May one month after we returned.

If it was what happened, be sure to have him work through the numbers and to ensure that they distributed the correct amount.

From what I understand putting the balance into an IRA would be a good step?

If you want more control over your funds, or the ability to buy funds or stocks that are not available as part of your 401(k) choices, yes, doing a rollover to an IRA would provide this. From your previous post, it sounded like you were not happy with the current choices, so this is probably a good choice for you.

AJ

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