nittanycheme
Established Member
Joined: Aug 8, 2011 14:26:36 GMT -5
Posts: 488
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Post by nittanycheme on Jul 6, 2014 16:27:39 GMT -5
I know that he is counting on the company stock for some funds, but does it have any funny rules? I worked for a private company, and they only buy/sell stock once per year (around the end of their fiscal year). And if you had over a certain amount, they could take up to 5 years to fully cash you out. So, that money may not be as easily available as you think. Private companies can set up a lot of rules about their stock, since they aren't on the open market.
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cronewitch
Junior Associate
Joined: Dec 20, 2010 21:44:20 GMT -5
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Post by cronewitch on Jul 6, 2014 16:37:58 GMT -5
***UPDATE*** I opened a Roth today at Vanguard with $1000. Questions: 1) I picked the Target Retirement 2040 fund (I'm 41). If I wanted to be more aggressive, should I have chosen the the 2045 fund? OTOH, if this is our potential EF, should I have it go in a 2030 fund? 2) DH has an old 401k he needs to move into an IRA (about 120K). Assuming we move it to a traditional IRA Vanguard Target fund, could we then move chunks of it to a Roth (and pay the income taxes now) as part of our tax diversification strategy? I could set up a Roth in his name to move the funds into. Sorry for such novice questions. ![](http://syonidv.hodginsmedia.com/vsmileys/shucks2.png) Beware when rolling a 401K to an IRA that if he is over 55 but under 59.5 you may not want to mix it with other IRA money. If he retires after 55 he can take his 401K without penalty. If he had it in a rollover he can roll it to a new employer before he retires so taking a new job at say 53 that might be better.
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phil5185
Junior Associate
Joined: Dec 26, 2010 15:45:49 GMT -5
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Post by phil5185 on Jul 6, 2014 16:50:43 GMT -5
The 10% bonds is OK at age 41 - but (extrapolating GG's data) at age 51 you'll already be 23% in bonds. I woulds want to stay closer to 10% bonds until age 55 or more. Ie, you might want to use Target 2050 or 2055.
You can do that - but it means prepaying about $35,000 or $40,000 in taxes on the $120k. It might be better to wait for age 70 1/2 and then sell a small amount each yr (RMD is about 4%) to stay in a lower marginal bracket.
Instead, if you put $11,000/yr into the Roths ($110,000 in ten yrs) the accounts will start to even out (for tax status diversity).
Good money management job!
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buystoys
Junior Associate
Joined: Mar 30, 2012 4:58:12 GMT -5
Posts: 5,650
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Post by buystoys on Jul 6, 2014 17:36:26 GMT -5
***UPDATE*** I opened a Roth today at Vanguard with $1000. Questions: 1) I picked the Target Retirement 2040 fund (I'm 41). If I wanted to be more aggressive, should I have chosen the the 2045 fund? OTOH, if this is our potential EF, should I have it go in a 2030 fund? 2) DH has an old 401k he needs to move into an IRA (about 120K). Assuming we move it to a traditional IRA Vanguard Target fund, could we then move chunks of it to a Roth (and pay the income taxes now) as part of our tax diversification strategy? I could set up a Roth in his name to move the funds into. Sorry for such novice questions. ![](http://syonidv.hodginsmedia.com/vsmileys/shucks2.png) Beware when rolling a 401K to an IRA that if he is over 55 but under 59.5 you may not want to mix it with other IRA money. If he retires after 55 he can take his 401K without penalty. If he had it in a rollover he can roll it to a new employer before he retires so taking a new job at say 53 that might be better. Not all 401(k) plans allow you to take your money at 55. It all depends on how the employer has the plan set up. My most recent employer did NOT allow this.
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cronewitch
Junior Associate
Joined: Dec 20, 2010 21:44:20 GMT -5
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Post by cronewitch on Jul 6, 2014 17:40:22 GMT -5
Beware when rolling a 401K to an IRA that if he is over 55 but under 59.5 you may not want to mix it with other IRA money. If he retires after 55 he can take his 401K without penalty. If he had it in a rollover he can roll it to a new employer before he retires so taking a new job at say 53 that might be better. Not all 401(k) plans allow you to take your money at 55. It all depends on how the employer has the plan set up. My most recent employer did NOT allow this. I think if you retired they would have to let you, that would be sad to be allowed without penalty and have your final employer stop you.
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Peace77
Senior Member
Joined: Dec 29, 2010 1:42:40 GMT -5
Posts: 3,950
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Post by Peace77 on Jul 7, 2014 12:29:35 GMT -5
Rolling funds to an IRA is NOT the same as taking funds out. Check with your plan's administrator.
DH's stock -- Can he sell a small portion of it? I suggest selling 10% and placing it in a mutual fund to lessen his risk.
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