02/01/2000 I will be retireing.I have a 401k,company penson,& company stock.Is it beter to roll them over into 3 ira's or all into 1 ira at one broker.It is going to be quite a bit after 30 years of work.The only thing I have seen on this is not to add to another ira that has paid taxes in it. thanks john
>>I have a 401k,company penson,& company stock.Is it beter to roll them over into 3 ira's or all into 1 ira at one broker.>>Are you certain you can rollover each of these to an IRA?I had an ESOP distribution a few years ago. I rolled different amounts into 5 mutual fund IRA's. The thing I have learned is that each IRA provider charges a yearly IRA fee. Some mutual funds wave the fee, if the IRA exceeds a specified amount. These fees ran from $12.50 per Management to $25 per fund per year.Thus in my case, I could have ended up paying $125 per year but luckily I exceeded their minimums.I would check each discount broker to see what yearly fees they charged for IRA accounts.I would also ask if I purchased mutual funds through their brokerage within the IRA account if the funds would also charge a yearly IRA fee.The only reason to limit a rollover to one broker is to pay only one yearly fee. I would imagine you could rollover into as many IRA accounts as you enjoy paying yearly fees for.Hope this helps...BGP
I think it depends on many considerations. If the amounts are indeed large, you may want to have several accounts at different firms for reasons of diversification. An IRA brokerage account for example is insured, but if you have a covered loss, you will not get your money immediately--maybe not for months. Multiple accounts gives you more options in the event of an unforeseen crisis.So if your accounts will be large enough so that annual maintenance fees are less than 0.2% or so, I would have three (or more) accounts at different firms, in different businesses, and in different geographical regions.One way to do this is to keep your 401K for now, if it is a good one.
Subject: Retirement Date: 9/1/99 5:38 PM Author: JRL Number: of 13612 02/01/2000 I will be retireing.I have a 401k,company penson,& company stock.Is it beter to roll them over into 3 ira's or all into 1 ira at one broker.It is going to be quite a bit after 30 years of work.The only thing I have seen on this is not to add to another ira that has paid taxes in it. thanks johnFor some reason you don't see this either, particularly from the IRA funds, even though our congress passed these laws to get you interested in a pension 30 years ago. One of the best features of it expires on 12/31/99 but there is still plenty to take advantage of. DON'T roll them into an IRA until you have looked at the possible tax advantages of multiple Lump Sum Distributions. Yes, multiple, and don't let anyone tell you you have to put them all together into one Distribution. You can get each or any of these accounts out for between 11% and 25% and structure the liberated funds to be almost as tax free as a Roth. There are too many factors depending on your age (at least 59 1/2) length of service (over 25 years will reduce the taxes somewhat, possibly), amount in each plan (the smaller the better), whether you have exercised your ESOP, and your income tax bracket, etc. to discuss without a lot more information on you. Prepaying the taxes, per se, is NOT a disadvantage, although painful to consider. This works even better if you are in the Federal Estate Tax Catagory (single over $650K or married over $1.3Mil, or expect to be when you both leave us), and/or don't need these funds to generate taxable income for your retirement income. This is not for everyone, but under the right circumstances it can be a tremendous advantage. Ed
02/01/2000 I will be retireingGreat!Is it beter to roll them over into 3 ira's or all into 1 ira at one broker.It is going to be quite a bit after 30 years of workIMHO, I would stick to one broker (and by inference, one IRA account) to keep down the paperwork, even if I had $1M to invest. Brokers are usually insured to $50M per account. If you want to keep track of different portfolios, use investment software.I assume that your company stock was also bought within some kind of 'qualified retirement plan', and accrues to you tax-deferred.Zev
IMHO, you have provided insufficient info. to answer you question adequately. However, one area to pay particular attention to is oyur company stock (on the presumption that you hold or a re the beneficiary of this stock inside of a qualified plan). You may wish to consider having the stock distributed to you immediately/soon & pay the taxes on that diostribution remembering that the amount you pay taxes on is your basis (purchase price) of the stock; not its current value. The difference bewtween purchase price & current/future value is called NUA (net unrealized appreciation) and the NUA is taxed as a long term capital gain (at lower rates) whien you sell the stock.
Please read the 2 posts from Edcosoft and Badger carefully and then go see an experienced tax advisor. They both bring up some very good points to the table for your specific situation. The 5 year averaging and the in-kind distribution of employer stock are advanced tax planning considerations of the code for qualified plans.You will need to run the numbers yourself, but the pain of immediate taxes may actually be better for you than the deferral of taxes.
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