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La Brujita 01-16-2005 02:39 PM

Basic Questions About Retirement Investing
A couple of basic questions. Thank you very much in advance for any help and I will research as well on my own but just looking for starting information.

1. I am currently "self employed" and have about 35k in a 401k from my previous company. I want to roll it over into an IRA account. I am thinking of using Citibank just since I do most of my banking there. Is there much of a difference where you roll over your 401k in terms of fees or other benefits? I know it says there is no annual fee but I am wondering if there are hidden costs that differ from ETRADE or perhaps better options.

2. Last year I invested $3000 in a Roth IRA. I intend to buy another this year. Am I correct that $3000 is still the limit? I know it is increasing to $4000 but if I understand correctly it is for tax year 2005. Also, very basic question but is the limit for the combination of what you invest in a traditional IRA and Roth IRA, I assume so. In other words I can't invest $3000 into each of an IRA and a Roth IRA correct?

3. I have a Putnam Roth IRA from about 4-5 years ago that has not done very well. Can I roll that over into another company or fund? It is Putnam Investors Fund CL-B if that means anything to anyone.

4. Any good links for mutual funds to invest in when looking at 30 or so year horizon once I rollover my 401k?

5. I am considering investing a few thousand in a mutual fund and I decided to just invest in an S&P indexed fund. Will there be much of a difference in fees if I do it from Vanguard, Citibank, ETRADE etc.? Also, should I worry about timing payments, ie x hundred per month or just dump it in whenever.

Thank you very much in advance, I know I asked a lot of questions some of which have probably been answered many times. Feel free to only respond to some.

If you choose to respond and want my two cents on a few limit or tournament nl hands (for whatever marginal benefit my eyes may provide) feel free to send them my way.

Best regards

GeorgeF 01-18-2005 02:55 AM

Re: Basic Questions About Retirement Investing
1.) Some places charge a yearly fee. brokerage fees vary from place to place. If you like vanguard I would use them. What do they charge to invest in an index mutual fund.

2.) I believe the limit is the total for all IRAs. The mutal fund company will give you the exact details.

3.) You can roll you ira over, your new broker will have a form authorizing the transfer.

4.) My guess is that you should just go with vanguard and use their site to research their funds. I see no reason for you to invest aggressively, if you feel you do try or for cheap ($200/yr) advice that might (or might not) work for you.

5.) The fees on index funds are small but they do vary, my guess is that vanguard is about 0.1% cheaper than others but you have to check. It will not be much. Monthly payments might help you keep ontrack.

vanguard has bond funds also. You should consider their asset allocation funds that put you into a number of different funds. Ask them for advice.

La Brujita 01-18-2005 08:57 AM

Re: Basic Questions About Retirement Investing
Thank you for your response. I appreciate you taking the time to do so. I am going to talk to a financial advisor about all of this, just wanted some background information so I could have some understanding of the right questions to ask.

Rolling over my Roth is a cool idea because I would like all my Roths in one place.

If anyone wants to know what I eventually find out, let me know and I will try to help.

TN_POKER_MAN 03-02-2005 07:34 PM

Re: Basic Questions About Retirement Investing
1. If you are going to use an investment professional to help you, you'll have to pay them (translated...there will be a commission). If they provide a service, they deserve to be compensated. From the sounds of things, you probably do need some professional help at this point in time.

2. No. The 2005 combined limit for IRAs is $4,000. Go with the Roth IRA. If you are self employed, look into a SEP-IRA in addition to the Roth IRA.

3. Putnam "b" shares. B shares at Putnam have a 7 year penalty for early withdrawal. If you don't like that Putnam mutual fund, consider transferring it to a different Putnam mutual fund. But if you sell Putnam and buy a different compnay's mutual fund, you'll most likely have to pay Putnam 2%-3% penalty. If you transfer it in an "as-is" manner (you keep the money invested in Putnam mutual funds) then there will be no penalty.

4. or

5. The difference between one company's index fund and the next is negligible. I'd base my decision on service rather than cost...unless the difference in cost is grossly more in one or the other. Just dump it in. The stock market hs positive returns about 65% of the time....gotta love those odds. Sure, it could go down the day after you put it all in, but that's not too likely. Think of it like getting dealt pocket rockets and getting all your money in the pot. Sure, you could lose, but that's not likely (even though we've all seen it happen).

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