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Well, thanks to everyone for helping me out. I'm seeing a certified
financial planner in February to sort this all out.

Thanks again.

- --
Michael Loll / michael.loll[at]NO.MORE.SPAM.verizon.net
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- quote -

Since the amount in the plan exceeds $5,000, the ex-employer has no choice, he
must be allowed to leave his moeny there.

Mike,
First off, let me say, you're 24 and have 35K in retirement savings
already? You go boy! I'm very impressed. Most young people your age have
very little if anything at all. You will have a very nice nest egg to
retire on whenever you choose if you keep this up.
Now, on to the parts of your questions I can help with..... From the
rollover side of things, to avoid paying taxes on the 35k you will have to
roll the money over into a traditional IRA or leave it where it is (if your
current employer will allow that) until you can join the plan at your new
job and then roll it directly into that plan. Whichever method you choose,
do a direct transfer. This is where one plan manager transfers it directly
to the other plan manager. This will allow you to avoid having taxes with
held from the money and having to make up the difference out of pocket.
whatever you do, do not touch the money or they will hold at least 20% out
for taxes and you have to make up the difference to do a complete rollover.
As for the mechanics of the IRA's, here's the short version..... You
can own both a traditional and a Roth IRA at the same time, however, your
total annual contribution can not exceed $3000 all total no matter how you
split it up between accounts. So you can not do $3000 to each. Fortunately
any amount you rollover does not count against the $3000 annual
contribution. Unfortunately, you will probably be counted as an eligible
participant for both years since you will be eligible for at least one day
in both calendar years, so your income may limit your contribution amount.
If your annual income is more than $40K you may not be able to deduct your
contributions. You can still contribute to a traditional no matter what
your income but it's a matter of what is deductible.
As for the Vanguard thing, I have heard many good things about them and
have been researching them myself for future investment consideration.
Can't speak personally beyond that. I would be careful about paying a
financial advisor to give you recommendations if he works for the company
you are interested in investing in. If there is a third party advisor you
can talk to who can lay out an overall plan, help educate you as to your
options, without "selling" a specific product that he gets income from that
would be your best bet.
There are several other things you could do with rollovers and IRA's that
are too detailed to get into on the board, if your would like to email me
off the board I would be glad to discuss them with you.

Kathy

"Mike Loll" <michael.loll[at]NO.MORE.SPAM.verizon.net> wrote in message
news:wkWOb.26870$ko5.11325[at]nwrddc01.gnilink.net...
- quote -

- quote -

Not true, you can have both. But you cannot put $3,000 in each. You can put a
total of $3,000 into them divided anyway you wish.

- quote -

a Roth. However, most custodians will do this in a way that to you will appear
seamless, although you would ahve paperwork reflecting the 2 step process.

For someone as young as you, the better choice is a Roth IF you can afford to
pay the taxes required without using any of the IRA money.


- quote -

Regular IRA always depends of meeting the twin test of not being an active
particpant in any employers plan at anytime in the year (your old employer's or
your new one) and the level of income you have.

If you are under the specified income treshold for your filing status, you can
deduct the contributions even if you are (or were) an active participant. Above
ther threshold level, you canno deduct if you are (or were at any time in the
year) an active particpant.

Just to confuse you even more, just becaue you are not contributing to a plan
does not necessarily mean you are not an active particpant.

- quote -

study necessary to make the choices on your own necessary, don't expect anyone
worth listening to, to give you that advise unless you are willing to pay for
it.

- quote -

product. Then you could even exceed the amount you could put into an emplyers
plan, but get no tax deduction for doing so. And it may or may not be a good
idea.

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A few questions regarding 401Ks and IRAs...

I'm 24. I am leaving for a new job. I have about $35k in
my 401K, I'll lose about $4k of employer contributions when I leave. My
401K is doing pretty well as of late, but I am limited to the funds I
can choose so I am thinking of rolling it over into an account at Vanguard.

My current funds are:

SSgA Government Money Market Fund
SSgA S&P 500 Index Fund
SSgA Large Cap Core Equity Fund
Fidelity Advisor Overseas Fund - Class T

I contribute 25% (of my 15%) of my monies to each.

A few questions I hope the group may be able to answer...

- From what I understand, you can not hold both a traditional IRA and a
Roth IRA at the same time, right? Or, better put, you can't contribute
$3000 to the traditional and $3000 to the Roth, right?

If I leave an employer, is it generally better to roll your 401K into an
IRA or a Roth IRA, assuming the investment vehicles available for each
are the same? Or, better put, what *can* you roll your 401K into?

The new employer has a 401K plan, *but* I would not be eligible until I
had 1 year of employment under my belt. I plan on being there for more
than a year. I want to open an IRA to invest pre-tax monies. But the
limits for contributions to an IRA are small - $3000 (as compared to the
limits in a 401K). What are my options? Since I am not eligible, does
that mean all of my IRA contributions would be deductible?

The funds in my current 401K are doing pretty well, but I only have a
choice of like 12 funds. At Vanguard (or elsewhere), I would have a
huge choice. Any recommendations on places to put my money? I say
Vanguard only because I have been reading some stuff on them lately, and
people seem to trust them.

What are my options to get me investing in retirement accounts to get me
close to the amount of money I would be investing in a regular 401K account?

I'd hate to lose a year of time - what I mean is, I see 1 year investing
$3000 as slow compared to 1 year investing $10k.

Thoughts?

Also, I was considering paying a Vanguard financial planner $500 (fixed
fee) to review all of this and recommend a good financial plan for
retirement with them. Has anyone used Vanguard's planning services
before? Is $500 a fair price for a one-time review of my retirement
situation? Would I be better looking for someone local? I'd like to
pay someone to look at everything because I really wonder if my fund
choices are the best available given my situation.

Woo! - lots of questions. Hopefully you all can point me in the right
place.

Thanks.

- --
Michael Loll / michael.loll[at]NO.MORE.SPAM.verizon.net

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