My wife, who has been on disability for a year is being let go from her job at UPS. She has participated in a 401k plan and has $114,000 in it. UPS says she can leave it there, transfer it or take payouts on it. I don’t have the first clue as to what would be best. Any advice would be appreciated. I have to go to sleep so I will not be able to answer any questions until tomorrow but chances are I would not know how to answer them anyway. Thank you.

Roll it over to an IRA with a good financial adviser if you are not comfortable on your own - or go with Schwab or Fidelity. You will have lots more investment options than the 8 to 12 funds offered by most 401k plans.

It's a retirement account, so you probably don't want to cash out or it's income tax + 10% penalty if your wife is under 59-1/2. Only do this if the cash need is critical.

Choice then is to leave it where it is or transfer it. If the investments are doing acceptably you can just continue managing it as you've always done.

Many people would opt to transfer it. You can transfer to an IRA Rollover. Lots of choices there. Mutual fund IRA like at Vanguard or Fidelity. Or a brokerage IRA like Schwab so you have nearly unlimited investment options.

(There's a couple "tricks" if you decide to roll over, but we can go over that later.)

What's her plan going forward? Is she going to get a different job that might have its own retirement plan? "Disability" is such a broad term that the answer is going to be different if she's not going to be able to work again. $114k is a nice little pile of money until it's all the money you'll ever have.

On a long time line, it's the fees that have the biggest effect on your rate of return.

I moved my 401k to an IRA account at Vanguard to take advantage of their low-fee managed funds. Vanguard has some of the best overall performance because if their low fees.

quote:

Originally posted by Aeteocles:
On a long time line, it's the fees that have the biggest effect on your rate of return.

I moved my 401k to an IRA account at Vanguard to take advantage of their low-fee managed funds. Vanguard has some of the best overall performance because if their low fees.

Fidelity is also good with low cost fee funds.What ever you do do not transfer the money to yourself before putting it in an IRA or it will be taxed.Do a direct transfer.Vangard or Fidelity or many others can help you with the transfer.

I've rolled a few from various employers and aggregated them in Vanguard funds. They can help you every step of the way if you just call them. They are a very low cost investment house so the fees to you ongoing and up front are really less than any other option. The investment choices are all pretty much the same, but if you use Vanguard named funds or Index funds, there are extraordinarily low fees. That's their angle. Investment efficiency.

quote:

Originally posted by kkina:
It's a retirement account, so you probably don't want to cash out or it's income tax + 10% penalty if your wife is under 59-1/2. Only do this if the cash need is critical.

401K's have an age 55 withdrawal threshold without penalty, as well as the all encompassing Rule 72T which allows withdrawals from any retirement without penalty, but have to be similar "lifetime" withdrawals, yada, yada ... IRA's have the 59 1/2 withdrawal threshold.

Here's the answer: go to UPS and ask to speak with their retirement counselor - it's free and non-binding. From there go to another financial advisor and get some PROFESSIONAL advice - even pay for it. Then come back to SigForum and tell us what you've done.

quote:

Originally posted by r0gue:
I've rolled a few from various employers and aggregated them

This ^^^^^
It may not apply to your situation but I have as well... mostly because simplify.

Having to administer 3 estates in the past 9 years has shown me the advantages of simplifying things as much as reasonably possible. I use a local financial adviser with Edward Jones that I trust and who has a history with my family going way back. I like having someone that I can talk to face to face any time as needed. I now have everything under one roof except for 2 small accounts that I can't move until I turn 65 next spring.

Look at the performance of the UPS account over 15 years or so then find a good fund or two at Vanguard and Fidelity to compare the returns over the same period.
Call both of those places and tell them what you're doing and they can give you suggestions.
If you decide to move to one of them do it with their help so you don't generate any tax bills. Should be pretty easy and painless.

When I had to retire from policing for medical reasons, Mrs. Mike had my city run 401k rolled into something we had control over. She put it into another 401k and it didn’t cost us any penalty. The thing now is making more money than when it was not under our control.

Go find a professional.

We started with googling Dave Ramsey and used his site to find us a local endorsed provider. We spoke to two of them and chose that way.

talk to the Pros

https://investor.vanguard.com/...T.srch=1&cmpgn=PS:RE

highly recommend Vanguard

----------------------------

There's something to consider, UPS has a fiduciary resonsibility to ensure that your money is being invested well.

OF course, so do the Fidelity's, Vanguards, Schwab, etc etc etc.

I'm a former employee of a Fortune 50 company and I've chosen to leave my 401K with them because they have done a very good job of taking care and growing it.

Good luck to you.

In answer to your question, roll it over into an IRA account with a major financial organization such as Fidelity or Vanguard, and wait till she is at least 59 1/2 years old before taking any out.

When I retired at age 60, I rolled my 401K into a managed IRA at Fidelity, I like their low fee's for managing it, and feel they have been doing a good job of it. Now at 65 years old, I am taking a modest distribution monthly.

I'm surprised they are letting her go after only a year of disability.

The TEAMSTER-UPS NATIONAL 401K TAX DEFERRED SAVINGS PLAN is run by Prudential.

There are 20 different 'funds' members can invest their 401K money in.
So there is no 'since it is with UPS it should make money".
It depends on which fund each individual employee invests in.

My cut and paste is a little sloppy.


Average Total Returns As Of
07/31/2019
Asset Class Name Prior Month Prior Quarter 1 Yr 5 Yr 10 Yr Or Gross Expense Ratio {Since Inception}


Stable Value
STABLE VALUE FUND 0273
Fund Summary 0.20% 0.60% 2.30% 1.84% 1.97% 0.04%
Fixed Income - Short Government Bond
GOVERNMENT SHORT-TERM INVESTMENT FUND 01K5, 0273
Fund Summary 0.19% 0.62% 2.29% 0.87% 0.47% 0.05%
Fixed Income - Intermediate Core Bond
BOND MARKET INDEX FUND 01K5, 0273
Fund Summary 0.22% 3.08% 8.08% 2.98% 3.67% 0.02%
Allocation - Target-Date Retirement Income
BRIGHT HORIZON RETIREMENT INCOME FUND 0273, 0284
Fund Summary 0.32% 3.12% 6.29% 4.53% 6.12% 0.07%
Allocation - Target-Date 2015
BRIGHT HORIZON 2015 FUND 0273, 0284
Fund Summary 0.33% 3.15% 5.97% 5.05% 7.52% 0.07%
Allocation - Target-Date 2020
BRIGHT HORIZON 2020 FUND 0273, 0284
Fund Summary 0.36% 3.31% 5.55% 5.52% 8.15% 0.07%
Allocation - Target-Date 2025
BRIGHT HORIZON 2025 FUND 0273, 0284
Fund Summary 0.38% 3.39% 5.10% 5.91% 8.73% 0.07%
Allocation - Target-Date 2030
BRIGHT HORIZON 2030 FUND 0273, 0284
Fund Summary 0.40% 3.42% 4.57% 6.42% 9.30% 0.07%
Allocation - Target-Date 2035
BRIGHT HORIZON 2035 FUND 0273, 0284
Fund Summary 0.42% 3.37% 4.03% 6.74% 9.73% 0.07%
Allocation - Target-Date 2040
BRIGHT HORIZON 2040 FUND 0273, 0284
Fund Summary 0.43% 3.42% 3.74% 6.96% 9.99% 0.07%
Allocation - Target-Date 2045
BRIGHT HORIZON 2045 FUND 0273, 0284
Fund Summary 0.43% 3.39% 3.57% 7.04% 10.08% 0.07%
Allocation - Target-Date 2050
BRIGHT HORIZON 2050 FUND 0273, 0284
Fund Summary 0.43% 3.38% 3.58% 7.14% 10.15% 0.07%
Allocation - Target-Date 2055
BRIGHT HORIZON 2055 FUND 0273, 0283
Fund Summary 0.43% 3.39% 3.63% 7.16% {8.74%} 0.07%
Allocation - Target-Date 2060+
BRIGHT HORIZON 2060 FUND 0273, 0283
Fund Summary 0.44% 3.36% 3.66% N/A {8.14%} 0.07%
Allocation - Balanced
BALANCED FUND 01KE, 0273
Fund Summary 0.84% 3.85% 8.46% 7.28% 8.95% 0.04%
Large Cap - Blend
S&P 500 EQUITY INDEX FUND 0273
Fund Summary 1.44% 4.30% 8.00% 11.32% 14.03% 0.02%
Mid Cap - Blend
S&P 400 MIDCAP INDEX FUND 01KH, 0273
Fund Summary 1.19% 3.06% 0.86% 9.23% 13.81% 0.01%
Small Cap - Blend
RUSSELL 2000 INDEX FUND 01KH, 0273
Fund Summary 1.20% 2.12% -3.69% 8.69% 12.58% 0.02%
International - Large Blend
INTERNATIONAL INDEX FUND 01KB, 0273
Fund Summary -1.70% 3.84% -2.72% 2.69% 6.09% 0.03%
Alternative - Diversified Real Estate
U.S. REIT INDEX FUND 01K2, 0273
Fund Summary 1.60% 0.80% 10.84% 7.69% 14.24% 0.05%

quote:

Originally posted by CA DuckHunter:
Roll it over to an IRA with a good financial adviser if you are not comfortable on your own - or go with Schwab or Fidelity. You will have lots more investment options than the 8 to 12 funds offered by most 401k plans.

Best idea posted is above.

Roll it over to vanguard.

quote:

Here's the answer: go to UPS and ask to speak with their retirement counselor - it's free and non-binding. From there go to another financial advisor and get some PROFESSIONAL advice - even pay for it. Then come back to SigForum and tell us what you've done.

CraigCPA has hit in right on. My wife and I have recently done this (albeit no UPS) and have been very happy. A professional consultant will (should) understand your long-term or short-term goals and invest your dollars accordingly.

I concur with the roll over to IRA advice offered above, though I have experience with JANUS Henderson funds and that would be my personal choice, specifically:

JANUS Global Technology Fund

JANUS Global Health Sciences Fund

or

JANUS 40 fund.

As with Vanguard,Schwab, etc. JANUS can offer assistance to make a smooth transfer.