Roll Over question

[Jake 48]

A former employee of DW has sent us a packet for a limited time to start receiving pension benefits without meeting their early retirement qualifications. My gut feeling is they are trying to eliminate their liabilities for the future
They are offering a lump sum $27,800.00 or various annuity payments average is $125.00 / month,basically take the cash now
We are well aware of the tax implications at this time of either of these options and we don't need the money now

What we would do is take the lump sum and roll it over into a IRA. I like Vanguard family of funds, used the online tools and our risk is a 80 / 20 split or 70/30 split, which falls into place with our risk tolerance for other investments

My questions are balanced, target or index fund? What would you do?

Second question and I have not ask our lawyer yet,but I like to research answers first as a check and balance where / how do the 401K and IRA accounts fit into our estate plan and trust? Do we need to list them as part of the trust or do the listed beneficiaries cover that? 

I appreciate any and all comments, even snarky ones
Thanks,
Jake

[clarkrl2]

One of the mistakes I made when I first started using funds in my retirement account was trying to use too many. You can usually get good results with just a few.

I looked up the vanguard Wellington fund which is a balanced fund that is 65% stocks and 32% bond with about 3% in short term cash reserve.

personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0021

If you wanted more exposure to equities you could put 80% of your money in the Wellington balanced fund and 20% in an index fund and this would make about 72% stocks.

If you want an even higher equity exposure use this table (balanced/index = %stock)

70/30 = 75.5% stocks

60/40 = 79% stocks

50/50 = 82.5% stocks

I think I would use the 50/50 and then you could tweak the plan later if you became uncomfortable.

[busymom]

I'm a fan of index funds, but that's just my personal preference.  BTW, I agree with taking the lump sum.  JMHO

[Bluerobin]

I rolled everything into a Roth and have it invested in individual dividend stocks.  Little fluctuation, and a higher return.

[saveinla]

Jun 17, 2017 8:51:02 GMT -5 Jake 48 said:

A former employee of DW has sent us a packet for a limited time to start receiving pension benefits without meeting their early retirement qualifications. My gut feeling is they are trying to eliminate their liabilities for the future
They are offering a lump sum $27,800.00 or various annuity payments average is $125.00 / month,basically take the cash now
We are well aware of the tax implications at this time of either of these options and we don't need the money now

What we would do is take the lump sum and roll it over into a IRA. I like Vanguard family of funds, used the online tools and our risk is a 80 / 20 split or 70/30 split, which falls into place with our risk tolerance for other investments

My questions are balanced, target or index fund? What would you do?

Second question and I have not ask our lawyer yet,but I like to research answers first as a check and balance where / how do the 401K and IRA accounts fit into our estate plan and trust? Do we need to list them as part of the trust or do the listed beneficiaries cover that? 

I appreciate any and all comments, even snarky ones
Thanks,
Jake

I was told that we did not have to list 401K & IRA as part of the trust, since they have named beneficiaries. Just make sure that they are current. Paging swamp to see if this is correct.

[swamp]

Aug 1, 2017 14:58:11 GMT -5 saveinla said:

Jun 17, 2017 8:51:02 GMT -5 Jake 48 said:

A former employee of DW has sent us a packet for a limited time to start receiving pension benefits without meeting their early retirement qualifications. My gut feeling is they are trying to eliminate their liabilities for the future
They are offering a lump sum $27,800.00 or various annuity payments average is $125.00 / month,basically take the cash now
We are well aware of the tax implications at this time of either of these options and we don't need the money now

What we would do is take the lump sum and roll it over into a IRA. I like Vanguard family of funds, used the online tools and our risk is a 80 / 20 split or 70/30 split, which falls into place with our risk tolerance for other investments

My questions are balanced, target or index fund? What would you do?

Second question and I have not ask our lawyer yet,but I like to research answers first as a check and balance where / how do the 401K and IRA accounts fit into our estate plan and trust? Do we need to list them as part of the trust or do the listed beneficiaries cover that? 

I appreciate any and all comments, even snarky ones
Thanks,
Jake

I was told that we did not have to list 401K & IRA as part of the trust, since they have named beneficiaries. Just make sure that they are current. Paging swamp to see if this is correct.

Depends.

If you want to make them part of a trust, you name the trust as the beneficiary.   Or you can pay it directly to the beneficiary.  It depends on the terms of the trust, the tax implications, the age of the beneficiary, and a smattering of other considerations. 

ETA:  Currently I have my retirement and DH's retirement payable to our estates, which sets up a trust for the kids through the will.  When they are adults, I will name them as direct beneficiaries.