Retirement Investments (401K Rollover)

[bean29]

I have a 401K rollover that I think has a really poor return.

I invested $10,154.16 on 12/6/04 in Fidelity Adv Freedom 2030-CL B. It rolled over to Fidelity Adv Freedom 2030-CL A in December. It is a target fund. My statement for 12/5/11 says it was then worth $11,594.65. I don't have online access for this account and don't know how to get it(I did go to their website but was not successful in gaining any info). I don't have my March statement yet.

I also got a notification that I am eligible to lake a lump sum payment from the Pension Plan of a former employer. If I remember correctly the estimated monthly payment I would get at retirement is about $210/month. The lump sum distribution amount is $32,350.80. It says I can take a monthly lifetime annuity of approximately $135 (I assume this would start immediately but I am not old enough to retire (born in 1964)).
I probably should have jumped on this when I first got the letter b/c the company is in a bad situation... could go belly up although they would probably be bailed out by the Fed Gov't before they would let them go under.

According the the Annual Funding Notice for the Plan - the Plan assets are $245,410,879 (line d says net Plan assets are $196,354,426) and plan liabilities are $217,229,013 with the funding target attainment percentage of 90.39%

Also I should probably move my 401K away from this company. I left it invested with the company b/c it is a large group and I liked my funding choices...but now I realize that if I move it I will benefit from lower expense ratios. I have $73,502 it is a Fidelity investment right now.

Modified to add: On the Fidelity web site for rollover options it indicates that if I move my 401K out of the Qualified Plan I could lose protection from creditors in a bankruptcy situation. I am not planning to go bankrupt but this would be a concern. I guess I mistakenly thought that IRA funds were also protected from bankruptcy.

I am thinking I should invest it in a target fund. Any suggestions?

[Deleted]

Jellybean -
First off Welcome to IBB.

Second, anytime you are talking about Rollovers/Transfers, Etc. There are many issues that can crop up. This is not really something you want or should handle over the Internet or the phone.
In Truth you should set up a time to go in to a local office of your Broker, and (if they are not Fidelity) and explain what is going on and what your concerns are {{ Bring your Documents}}, ask them what can be done to put you in a better frame of mind.
IF they ARE Fidelity, do exactly the same as above, but see what else they have that you can roll everything into that will alleviate your concerns and worries..

Now, as to TARGET DATE FUNDS - I can not say much about them, other than to tell you that I and many folks here just Plain Hate them, for many reasons. Mostly though because there is just not enough History ont hem to Prove whether they work, or if like Many Leveraged ETF Hiccup due to Re balancing that is needed to stay with in the prospectus goals.

Again, welcome to IBB, Feel free to ask any questions you have. There are a lot of great folks here with a lot of great Info willing to offer their Opinion.

D.I.

[bean29]

Thanks DI.

FYI I misspoke I meant I was thinking about putting the $$ in an Index Fund. Right now I have a wide variety of funds I am invested in.

I will check around for a recommendation on a broker.

[Bluerobin]

I had my broker do my rollover - I never touched the funds. Lots less complicated that way. I think I am doing better in individual dividend stocks, so most of the money is there. Over the course of several years, I then rolled the IRA into a Roth and paid the taxes, while in early retirement and earning the least, before SS. That may or may not work for you. Note, I paid the tax from outside the IRA, so I could keep all the funds working, tax free.

[beenherebefore]

I had money in a Fidelity 401k from an old employer and it practically took an act of God to get my money out of there. I finally tracked down the plan administrator from my old job, which went belly up, found him at a different company, he signed documents, I sent them back to Fidelity, they 'lost' them, repeated the process and finally had my money moved into a 401k account at TD Ameritrade.

I moved three other ira accounts with no problem, the only issue was with Fidelity.

Get your money out of there and roll it over, make sure the proper forms are used so you don't have to pay any taxes/penalties.

Good luck and Welcome!

[bean29]

Thanks for the replies everyone. WXYZ all that makes my head hurt, but it does look like the assets would continue to be shielded from bankruptcy.

I thought my 401K assets were shielded from the employer's financial problems - the $$ are segregated by fidelity in an account with my name on it. The only thing I have to worry about is if they no longer have a plan, they I would have to move it to an IRA right?

The pension is a different story, however it does look like it is pretty well funded right now. It appears to be a good idea to pull it out though b/c pension funds are invested really conservatively while if I put it in an index fund my earnings will hopefully be greater before I reach retirement age.

[bean29]

Oh, and just to clarify there are 3 separate pools of $ I am talking about

$10,154.16 in Fidelity Freedom 2030-CLB ( a 401K rollover for a kaput employer)
$73,502 which is a former employer's 401K plan where Fidelity is also the trustee
and approx $32,350 available if I pull my pension $ from the above former employer and invest it in a 401K/IRA.

I also have a 401K with my current employer but my understanding is I am better off not rolling these $$ into my current 401K.