Company 401k Plans

Top 620. Jul 25, 2005 8:46 AM

» bob90245 - Re: Re: Picking funds like picking cereal

In response to Re: Picking funds like picking cereal posted by allancoleman:

Interesting that Kirk and allancoleman are focusing on Fidelity. IMO, that was not the point of the article. The point of the article was that no matter who your 401k plan sponser (Fidelity, Vanguard, Schwab, etc.), the employer through the 401k administrator has the ability to offer "open architecture".

My question was simply, does anyone's 401k have this "open architecture"?

-- posted by bob90245

Top 621. Jul 25, 2005 12:39 PM

» SteveT - Re: Re: Re: Picking funds like picking cereal

In response to Re: Re: Picking funds like picking cereal posted by bob90245:

My question was simply, does anyone's 401k have this "open architecture"?

Not yet. smile

I am currently working on a Roth 401(k). It is going slow. I was told to poll the group to gauge interest. I asked what data they are hoping to find in this survey. So far no answer.

I am wondering if changing to an open architecture plan would increase the fees. My guess is it would offer an excuse to up the costs. I'll keep you posted.

-- posted by SteveT

Top 622. Jul 26, 2005 5:53 AM

» lcha - Re: Retirement blunder: Raiding the 401(k)

In response to Retirement blunder: Raiding the 401(k) posted by Kirk:

...as I think many will have to work much longer to pay off their homes they've taken equity out of.

The quandry these folks will be in is while they have no savings with which to live on, they are also overweight and out of shape and not in the best of health to continue to work past age 65.

Much of what motivates me personally is the fear of being old and sick and broke. Unfortunately, that will be the fate of the majority retirees.

-- posted by lcha

Top 623. Jul 26, 2005 11:30 PM

» AL_W - Re: Retirement blunder: Raiding the 401(k)

In response to Retirement blunder: Raiding the 401(k) posted by Kirk:

.... as I think many will have to work much longer to pay off their homes...

I just made my final payment. Free and clear finally.

-- posted by AL_W

Top 624. Jul 29, 2005 11:28 AM

» allancoleman - Re: Retirement blunder: Raiding the 401(k)

In response to Re: Retirement blunder: Raiding the 401(k) posted by AL_W:

congradulations on paying off your home smile . sure makes retirement budgeting alot easier . i consider being debt free , including your home , to be a important part of maintaining one's critical mass

-- posted by allancoleman

Top 625. Aug 4, 2005 5:49 PM

» bob90245 - Average 401(k) Account Balance Up

Average 401(k) Account Balance Up 10 Pct.
AP
Thursday August 4, 7:23 pm ET

Average 401(k) Account Balance Up 10 Percent, Reaching a Five-Year High of $61,000

NEW YORK (AP) -- The average 401(k) account balance rose 10 percent in 2004, reaching a five-year high of $61,000, according to preliminary study data provided by Fidelity Investments.
"It's a combination of market action and net contributions," said Steve Deschenes, executive vice president of institutional retirement services with Fidelity, a Boston investment firm.

Still, the average 401(k) balance remains below 1999 levels of $64,000. In 2000, when the stock market bubble burst, the average 401(k) balance fell to $55,000 and continued to spiral downward until it hit $44,000 in 2002. The average balance began to tick higher again in 2003 when it again hit $55,000, according to Fidelity data.

Workers appear to be contributing roughly the same percentage of their salary to their 401(k) plans as they have in years past, indicating that stock market moves are primarily responsible for the recent declines. Average workers deferred 7 percent of their pretax salary to an employer-sponsored 401(k) in 2004, a percentage that has remained steady since 2001, according to Fidelity. Meanwhile, 66 percent of eligible workers participated in their 401(k) plan in 2004, the same as in 2003.

Employers, meanwhile, increased the average number of investment options they offered in their 401(k) plans to 20 in 2004, compared with 18 in 2003, the study said. In 1999, the average number of investment options was 10.

Lifecycle funds also grew more popular among Fidelity's 401(k) clients in 2004, when 78 percent of plans offered them, compared with 72 percent in 2003. Lifecycle funds are being touted as a hassle-free 401(k) option because the asset-allocation is adjusted automatically based on the investor's target retirement date.

The study was based on an analysis of 10,800 defined-contribution plans, which represents about 8.6 million participants.

-- posted by bob90245

Top 626. Sep 2, 2005 6:48 PM

» rasputin - 401K vs. 403b

Our for-profit heathcare facility was recently purchased by a not-for-profit organization. I believe it's been said that we need to convert our plan from a 401K to a 403b. The new organization is planning to use AIG-Valic. As you may know, my preference is for Vanguard (which we have been using for the 401K). I've also been told that for some reason Vanguard couldn't take us (the new entity) on. I'm not sure why not, but I think I may have had to do with the average participant's account balance. The new company (the not-for-profit group that bought us) doesn't seem in a big hurry to have us change. Are there laws requiring us to do so and is there a time frame? And I'm wondering if we'll be able to leave "old money" with Vanguard. I should know this stuff, but I don't. Any help would be appreciated.

-- posted by rasputin

Top 627. Sep 2, 2005 7:40 PM

» allancoleman - Re: 401K vs. 403b

In response to 401K vs. 403b posted by rasputin:

sounds like you need some more information . smile .

in the old days , 401(k)s and 403(b)s were entirely different animals . now they are very similar in the eyes of the IRS . the only problem is , unlike IRAs where the rules are very clear for all custodians and have been for years , the rules for 401(k)s and 403(b)s really leave the custodians with a lot of room to make up their own rules . therefor you really are going to have to wait until your new 403(b) custodian tells you exactly what they are going to allow you to do with your old 401(k) money . and you're pretty much at their mercy cause the IRS regulations really do give them alot of room to manage your money the way they want , unlike IRAs . plus , unlike IRAs , you can only roll your money from a 401(k) or a 403(b) to a IRA when you leave employment . unlike IRAs where you can roll your money from IRA to IRA pretty much whenever you want as long as you satisify the once a year calendar limit . for example , you can transfer / rollover money from a 401(k) to a IRA as often during the year as you want , however you can only transfer money from one IRA to another IRA once a year .

i believe IRS publication 560 is going to be your best guide because they have separated 401(k)s from publication 590 , which is the guide for IRAs . just my opinion of course . but i do have money in IRAs / ROTHs / and 401(k)s , so do spend quite a bit of time trying to figure out my best options between those different vehicles . good luck .

-- posted by allancoleman

Top 628. Sep 2, 2005 10:29 PM

» AL_W - Re: 401K vs. 403b

In response to 401K vs. 403b posted by rasputin:

RAS,

Generally when they close a plan, which is what they have to do to convert you to a 403b, you are entittled to withdraw the funds. Of course, doing a withdraw via a roll-over to an IRA avoids any tax pitfalls. I gather your 401K is thru Vanguard, so a roll-over can more simply performed than when moving between two different agents.

The only real negative of rolling over to an IRA is that if you file bankruptcy, the $ in an IRA has no creditor protection, whereas a 401K, 403b, or defined retirement plan does have protection.

They my not be up front about doing a withdrawl, so ask them to clarify. My company was totally mum about this, but when I called the agent ( Fidelity ), they told me exactly how to do it.

Personally, seeing an insurance company name on a new plan would not rest well with me.

-- posted by AL_W