My dad was recently downsized and now has to do something with his ESOP stock. I am leaning toward having him roll it over into an IRA, but am asking for any suggestions. Thanks.
When I was "downsized" in 1993, I had the choice of stock or cash from an ESOP plan. I chose the cash and put it in an IRA at Vanguard, investing all of it in the Vanguard Index 500 fund. Since then, the stock I liquidated has lost about 70% of its value and the index fund has gained about 200%. My experience doesn't necessarily constitute advice, but I suspect that your dad needs more diversification than he can get holding the ESOP stock. Besides that, it just feels good to dump the stock of the company that dumped you. Chips, betting that Efficient Market Theory is correct
Greetings, Bulldog32, and welcome. You asked:<<My dad was recently downsized and now has to do something with his ESOP stock. I am leaning toward having him roll it over into an IRA, but am asking for any suggestions. Thanks. >>Your dad may be far better off keeping the stock and paying income taxes on its basis now rather than putting it in an IRA. For details, see my article "Taking Stock" at http://www.fool.com/retirement/manageretirement/manageretirement4.htm. Often, it's better to keep it rather than putting it in an IRA.Regards..Pixy
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