I recently separated from state employment and have money sitting in a 401k and a pension fund. I need to roll it into an IRA. I don't currently have an IRA or work with any financial advisor. I recently met with a CFP who can set up the IRA, find out what my goals are and then manage the money from there charging 1.3% of total assets managed annually.

I also met with an Edward Jones advisor and they charge 4.5% of the money I roll over plus 4.5% of future contributions plus like a $40 annual fee and the mutual fund charges 0.5% management fees.

Not sure of the advantages or disadvantages of either and was hoping for some input.

Also, if I already know how I want to invest the money, Is this just something I can do myself (open an IRA and roll the money into it)? If so, how do I go about doing that?

Also, thoughts on converting to a Roth now and going ahead and paying the taxes vs rolling into a traditional and kicking the tax can down the road.

Sorry for all the questions. Thanks!

This is what I would do, roll it into vanguard or td ameritrade under a robo advisor that allocates it based upon your goals and wishes.

I personally have had success with TD Ameritrade's select portfolio core aggressive etf portfolio, but I'm aggressive to growth for my age.

I would not convert to a roth. Just get it rolled over and allocated to your risk tolerance. I also think the fees your quoted are high and I personally wouldn't pay that.

As for future investments / savings, I would look at your roth vs traditional split today and try to have a 50/50 split between roth and traditional Ira savings. That keeps you diversified and not all in one way or another. Some may tell you to go 100% roth if you can and there's good reason to if you've exhausted all other investment options IMO (max 401k, max HSA, etc.).

bamdvm said:

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I recently separated from state employment and have money sitting in a 401k and a pension fund. I need to roll it into an IRA. I don't currently have an IRA or work with any financial advisor. I recently met with a CFP who can set up the IRA, find out what my goals are and then manage the money from there charging 1.3% of total assets managed annually.

I also met with an Edward Jones advisor and they charge 4.5% of the money I roll over plus 4.5% of future contributions plus like a $40 annual fee and the mutual fund charges 0.5% management fees.

Not sure of the advantages or disadvantages of either and was hoping for some input.

Also, if I already know how I want to invest the money, Is this just something I can do myself (open an IRA and roll the money into it)? If so, how do I go about doing that?

Also, thoughts on converting to a Roth now and going ahead and paying the taxes vs rolling into a traditional and kicking the tax can down the road.

Sorry for all the questions. Thanks!

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4.5%?!?!?!

A lot of questions you're asking here. I'm sure one of us trusty advisors on this board would be happy to answer your questions. It would probably be in your best interest to ask privately though so some more private information can be divulged about your particular situation.

Agree with rolling it into Vanguard and do one of the target retirement funds that aligns with your timeline. With respect to Roth conversion, it depends on what tax bracket you're going to fall in compared to what you expect to be in in retirement and whether you can afford the taxes on the converted funds without having to use some of the converted funds to pay the tax.

SquareOne07 said:

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bamdvm said:

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I recently separated from state employment and have money sitting in a 401k and a pension fund. I need to roll it into an IRA. I don't currently have an IRA or work with any financial advisor. I recently met with a CFP who can set up the IRA, find out what my goals are and then manage the money from there charging 1.3% of total assets managed annually.

I also met with an Edward Jones advisor and they charge 4.5% of the money I roll over plus 4.5% of future contributions plus like a $40 annual fee and the mutual fund charges 0.5% management fees.

Not sure of the advantages or disadvantages of either and was hoping for some input.

Also, if I already know how I want to invest the money, Is this just something I can do myself (open an IRA and roll the money into it)? If so, how do I go about doing that?

Also, thoughts on converting to a Roth now and going ahead and paying the taxes vs rolling into a traditional and kicking the tax can down the road.

Sorry for all the questions. Thanks!

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4.5%?!?!?!

A lot of questions you're asking here. I'm sure one of us trusty advisors on this board would be happy to answer your questions. It would probably be in your best interest to ask privately though so some more private information can be divulged about your particular situation.

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Sorry. To clarify, the 4.5% is what the particular mutual fund they were recommending (American Funds) charges to buy shares of the fund.

bamdvm said:

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SquareOne07 said:

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bamdvm said:

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I recently separated from state employment and have money sitting in a 401k and a pension fund. I need to roll it into an IRA. I don't currently have an IRA or work with any financial advisor. I recently met with a CFP who can set up the IRA, find out what my goals are and then manage the money from there charging 1.3% of total assets managed annually.

I also met with an Edward Jones advisor and they charge 4.5% of the money I roll over plus 4.5% of future contributions plus like a $40 annual fee and the mutual fund charges 0.5% management fees.

Not sure of the advantages or disadvantages of either and was hoping for some input.

Also, if I already know how I want to invest the money, Is this just something I can do myself (open an IRA and roll the money into it)? If so, how do I go about doing that?

Also, thoughts on converting to a Roth now and going ahead and paying the taxes vs rolling into a traditional and kicking the tax can down the road.

Sorry for all the questions. Thanks!

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4.5%?!?!?!

A lot of questions you're asking here. I'm sure one of us trusty advisors on this board would be happy to answer your questions. It would probably be in your best interest to ask privately though so some more private information can be divulged about your particular situation.

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Sorry. To clarify, the 4.5% is what the particular mutual fund they were recommending (American Funds) charges to buy shares of the fund.

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Ah ok, that makes more sense!

You'll hear those referred to as "A-Shares" or "front end loads". There are some great alternatives to that out there that, depending on your situation, may make sense exploring. If you're interested in having somebody solve that for you and put together something more comprehensive as you start this new chapter, I'd recommend interviewing a few different advisors and finding somebody you believe will do right by you and that you have a good relationship with.

Thanks!

Open a Fidelity IRA account (Free...Easy Rollover process....Good investment choices and Planning Tools).

Go here and figure out an Allocation Strategy: https://money.cnn.com/tools/assetallocwizard/assetallocwizard.html

Go here and find funds that match those descriptions: https://investor.vanguard.com/etf/list#/etf/asset-class/expenses-fees

Just a warning, that allocation tool is little conservative, so I'd go a little heavier on stocks than it recommends.

bamdvm said:

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SquareOne07 said:

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bamdvm said:

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I recently separated from state employment and have money sitting in a 401k and a pension fund. I need to roll it into an IRA. I don't currently have an IRA or work with any financial advisor. I recently met with a CFP who can set up the IRA, find out what my goals are and then manage the money from there charging 1.3% of total assets managed annually.

I also met with an Edward Jones advisor and they charge 4.5% of the money I roll over plus 4.5% of future contributions plus like a $40 annual fee and the mutual fund charges 0.5% management fees.

Not sure of the advantages or disadvantages of either and was hoping for some input.

Also, if I already know how I want to invest the money, Is this just something I can do myself (open an IRA and roll the money into it)? If so, how do I go about doing that?

Also, thoughts on converting to a Roth now and going ahead and paying the taxes vs rolling into a traditional and kicking the tax can down the road.

Sorry for all the questions. Thanks!

---

4.5%?!?!?!

A lot of questions you're asking here. I'm sure one of us trusty advisors on this board would be happy to answer your questions. It would probably be in your best interest to ask privately though so some more private information can be divulged about your particular situation.

---

Sorry. To clarify, the 4.5% is what the particular mutual fund they were recommending (American Funds) charges to buy shares of the fund.

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We made that mistake of the 4.5% load on buying American Funds through an advisor, who received. nice commission from the deal. We've since been fixing these type of mistakes as we transition our investments into Vanguard.

I rolled a 401k from a previous employer into Merril Lynch. No rollover fees. They manage both IRA's for 1% annually (paid monthly). Zero fees or commissions for trades. Allocation of funds/stocks is based on my risk tolerance.

4.5% rollover fee is outlandish!!!

Kenneth_2003 said:

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I rolled a 401k from a previous employer into Merril Lynch. No rollover fees. They manage both IRA's for 1% annually (paid monthly). Zero fees or commissions for trades. Allocation of funds/stocks is based on my risk tolerance.

4.5% rollover fee is outlandish!!!

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To be fair, that 4.5% is a front load one-time expense where the alternative is the fee based approach you're opting for.

Many prefer the ~1% annually, but it shouldn't be compared flatly to a front end load. One is recurring, one is one time.