Jami

“Dear Steve,

I’m losing money in my 401k. I left my 401k in my ex-employers plan. I started at $73000.00 and now it is down to $47,500. I really want to get it out of there but I have no idea where to put it. Can you offer any ideas?

Jami”

The Answer:

Dear Jami,

I matters like this I turn to my friend Paul Bennett at c5 Wealth Management for advice. Here is what Paul wanted you to know.

The good news is since you have satisfied the “separation from service” IRS requirement; you can rollover your 401k into an IRA. There are a few things that you should consider before doing so:

1. Your Investment Choices Expand Immensely: You will be able to invest in basically any type of investment (mutual fund, stock, exchange-traded fund, bond, etc.)
2. No Loans: An IRA does not have a loan provision, whereas your 401k probably does – in other words, you won’t be able to take a loan from the IRA. If you transfer the 401k to a new 401k, you should be able to maintain a loan provision.
3. Direct Transfer: Make sure that you do not take possession of the funds if you decide to leave the 401k – as this can trigger taxes and penalties. Your best bet is to discuss this with the HR department of your prior employer to ensure that if they cut you a check it is made payable to the company where you establish your IRA, FBO (“For the Benefit Of”) your name and account number (Example: Charles Schwab & Co, Inc, FBO John Smith, account# 12345).
4. Hire an independent professional Financial Advisor: Hiring a credentialed advisor (preferably a Certified Financial Planner) [Editor: like c5wm] is your best bet to ensure that your new IRA rollover is handled correctly and allocated properly based upon your risk tolerance, objectives and time horizon. Working with an independent advisor who acknowledges that he/she is a fiduciary makes certain that he/she acts in your best interest at all times.

I hope that helps you find your way.

Steve & Paul

The Answer:

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Read the full article at GetOutOfDebt.org, click here: Jami is Worried About Losing Money in Her 401k And Wants Options

Donna

“Dear Steve,

I have my home paid for and owe nothing on my car, I have a rental that I owe $25000 and I have it rented for $475.00 month. My payment is $303 month and my insurance is $33.00 month and my taxes are $100 month. I want to sell my rental but with the economy I will have to wait.

I have an annuity worth right now of $29000. I have 20,000 in savings and cds. I am 73 years old and I am a real estate broker associate and the market as you know is bad. My ss is $1000 a month. .

Should I take my money out of the annuity and pay off my rental and have added income. I would like to sell my rental but their credit is not good enough yet. Maybe in 2 years when the market is better, hopefully, I can sell this home. It is worth $75,000

Donna”

The Answer:

Dear Donna,

When I saw your question I immediately knew who I needed to ask for a better answer than I could give you and that is my friend Paul Bennett who is a Certified Financial Planner.

Mr. Bennett is a Certified Financial Planner™ professional (CFP®), Chartered Financial Consultant (ChFC), Accredited Investment Fiduciary™ (AIF®) and Managing Partner of c5 Wealth Management, LLC. Mr. Bennett has over twenty years of financial planning experience. He specializes in providing objective, unbiased and creative solutions for families and businesses regarding their investment management and financial planning needs. To learn more about Mr. Bennett and c5 Wealth Management, please visit www.c5wm.com.

Here is what Paul said when I forwarded him your question.

“Donna – I have to answer your question with a question first – do you need additional monthly income to make ends meet?

Finally, I agree with your assessment of the current real estate environment; it is not a time to sell – buyers are on the prowl looking for deep discounts. Wait it out. – Paul”

It certainly looks like Paul had some valuable advice to offer and good feedback. It does make sense to wait it out if you can make it month-to-month right now without cashing out the annuity. I just knew Paul was the “go to” guy for your question.

Big Hug!

@GetOutOfDebtGuy

The Answer:

Other Related Articles to Read

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• Jami is Worried About Losing Money in Her 401k And Wants Options
• Should We Cash Out the 401k to Pay Off the Mortgage? – Lorriell
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Read the full article at GetOutOfDebt.org, click here: Donna Wants to Know “Should I Take My Money Out?”