Author Topic: 401k rollover to annuity or new company's plan?  (Read 2034 times)

BeFalterm

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401k rollover to annuity or new company's plan?
« on: September 22, 2015, 01:23:37 PM »
I started a new job and my financial advisor wants me to roll over my 401k ($400k+) from my old employer into an annuity. I already own an annuity (but understand that I can't add to it) and would rather put the money into my new employer's 401k. I like the idea of a larger 401k. I don't know if it's possibly that I put part of the balance into my new job's 401k and part into an annuity - I would be open to that but right now I just don't feel right about putting the full amount into an annuity. I also have a Roth IRA and will get a small pension from a previous employer. I'm 53 and plan on retiring at 62 (maybe a bit sooner). What would you do? Thank you!

NotJen

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Re: 401k rollover to annuity or new company's plan?
« Reply #1 on: September 22, 2015, 01:30:29 PM »
If it were me, I would put it in a rollover IRA with Vanguard (or other low-cost investment firm).

I don't know much about annuities, except that they are generally a bad idea, especially for investments in tax-advantaged accounts.

Even though my current work 401(k) has low fees, I would still roll over into Vanguard where I could choose from all of their investment options.

RWD

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Re: 401k rollover to annuity or new company's plan?
« Reply #2 on: September 22, 2015, 02:17:06 PM »
If it were me, I would put it in a rollover IRA with Vanguard (or other low-cost investment firm).

Same here. You have a lot more control over your money in your own IRA.

I'm not a fan of annuities. What does your investment policy say?

MDM

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Re: 401k rollover to annuity or new company's plan?
« Reply #3 on: September 22, 2015, 02:36:41 PM »
...roll over my 401k ($400k+) from my old employer into an annuity.
...put the money into my new employer's 401k.
...put it in a rollover IRA with Vanguard (or other low-cost investment firm).
What would you do?
BeFalterm, welcome to the forum.

Of those three choices, the last I would make without significantly more study is the annuity.

Without knowing more about your annual income, etc., the rollover IRA would be my kneejerk response.  If, however, you might want to do backdoor IRA contributions then the new employer's 401k becomes more attractive.  See http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/ for information that usually helps one get more specific recommendations.

BeFalterm

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Re: 401k rollover to annuity or new company's plan?
« Reply #4 on: September 22, 2015, 05:45:07 PM »
Thank you, everyone! I really appreciate it.