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Author: chmiller10 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Retirement Date: 8/2/1999 9:37 AM
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I am a newly retired teacher with 60K that I must rollover from my pension fund into an IRA. I have a broker at Prudential who was recommended to me by my mother and he has done very well by her. He has her in some blue chip Dow stocks and in FTU where she owns about 80K shares. I am looking to do the Fool 22345 with a double on GM, Sears, Goodyear and Eastman Kodak. I will put 20-25K into this Dow Portfolio. I am thinking of adding to my DRP's, a 1000 apiece for Atmos, Johnson Control, and Washington Gas Light with 4K into MA Hanna. I figure 5K each into Dell, Cisco, AFLAC and Diebold. I will keep the balance in a Money Market fund for a bit until I get a chance to do some research on Amgen, Xilinx, and Compaq plus some other mid and small caps. I am new to this game and would appreciate some one's opinion on the above
Thanks
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Author: WilliamLipp Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12698 of 76418
Subject: Re: Retirement Date: 8/2/1999 10:51 AM
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chmiller10 Date: 8/2/99 9:37 AM Number: 12694
I am a newly retired teacher with 60K that I must rollover from my pension fund into an IRA. I have a broker at Prudential who was recommended to me by my mother and he has done very well by her.

This broker will probably be charging you much more than $10 commission per trade. The first question is whether you need such a broker - it doesn't sound like it below. You can find information about selecting a discount broker on the Discount Brokers board and their FAQ.

The second question is the standard used to measure "has done very well by her." The Foolish standard would be to compare the performance of her portfolio to the S&P500 with dividend reinvestments. The reasoning is that index investing is a no-effort approach that can be managed for extremely tiny fees, so anybody making money from your investments should be adding value above this "dumb-as-a-stump" approach." Take a 3-5 year period for the test, and take all money at the beginning of the period and invest in S&P500. Add and subtract cash the same as she did, buying and selling S&P500. It's simplest to ignore dividend reinvestment for the first approximation, and just use the S&P500 index (which does not reinvest dividends).

I am looking to do the Fool 22345
While this is still a respectable Dow Dividend Approach, the Fools have found some they like even better. They've changed the Dow Dividend Approach that is the Official Foolish Four twice since this one. Check out the Foolish Four Portfolio Report and the informational links from their to learn more about this.

I am new to this game and would appreciate some one's opinion on the above

You seem to have a careful, methodical, reasonable approach to this. I think you are going to be thrilled at the information you find around the Fool. If you haven't done so, you should consider a quick cruise through the Fool School's 13 steps to Foolishness from the Home Page - it sounds like you already know most of this but might find a few additional nuggets.

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Author: Bobbcat Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12731 of 76418
Subject: Re: Retirement Date: 8/2/1999 6:55 PM
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<<I am a newly retired teacher with 60K that I must rollover from my pension fund into an IRA.>>

There are many valid reasons to rollover your funds into an IRA, and I would recommend doing so.

But why "must" you? ???? Pixy ????

I'm not sure about not-for-profit or governmental plans, but I know you can't be forced out of a 401k plan if you have more than a $5,000 vested balance.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12747 of 76418
Subject: Re: Retirement Date: 8/3/1999 6:58 AM
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Bobbcat writes:

<<I am a newly retired teacher with 60K that I must rollover from my pension fund into an IRA.>>

There are many valid reasons to rollover your funds into an IRA, and I would recommend doing so.

But why "must" you? ???? Pixy ????

I'm not sure about not-for-profit or governmental plans, but I know you can't be forced out of a 401k plan if you have more than a $5,000 vested balance.


They are any number of reasons a distribution may be required from 401k/403b plans on normal retirement. The plan specs may dictate it. Or perhaps the retiree has attained age 70 1/2. Generally, though, those younger than age 59 1/2 with over $5K in the plan cannot be forced to remove those funds from that plan until they attain normal retirement age under that plan.

Regards..Pixy

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