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Author: Bulldog32 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76079  
Subject: Rollover of ESOP Date: 3/19/2000 8:13 AM
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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.
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Author: Chipsboss Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20258 of 76079
Subject: Re: Rollover of ESOP Date: 3/19/2000 10:32 AM
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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

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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: 20262 of 76079
Subject: Re: Rollover of ESOP Date: 3/19/2000 10:41 AM
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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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