Better option than Citi Smith Barney Rollover IRA?

I am considering opening a Rollover IRA with Citi Smith Barney, however I’m concerned about the 1.5% annual management fee. It seems high for a long-term retirement investment.

Obviously if they can beat the average investor by 1.5% per year, it’s a no-brainer but I am curious about the alternatives out there.

How to Rollover a 401k Into an IRA (individual Retirement Account)

 

Learning how to rollover a 401k into an IRA is relatively easy. Most custodial companies can tell you how to transfer or rollover a 401k into IRA funds. Just be sure that this is the decision that you wish to make.

If you are trying to learn how to rollover a 401k into an IRA, you are probably changing jobs. If not, I would not suggest that you make this move. Annual contribution limits are much higher in 401ks than they are in IRAs and employers often match contributions.

If you are changing jobs then you probably will have to transfer or rollover 401k into IRA funds, since 401Ks are employer sponsored programs. A person that is about to become self-employed or is opening his own business can set up a 401k-plan, because of recent changes in the legal structure of these accounts. You just need to find a custodial company that offers self-managed 401Ks and you can invest the fund in anything from real estate to tax liens or stick with the more traditional, but highly volatile stock market.

The First Step

 

You are wondering how to rollover a 401k into an IRA, so here’s the first step. Decide if you actually want a roll-over or if a transfer is the better option.

Rollovers and transfers are different transactions, but the terms are often used interchangeably by custodial companies. That causes some confusion.

Rollovers require the liquidation of the holdings within the account. Transfers might not. Many assets can be transferred from one institution to another, as long as the custodian allows those investment types.

A rollover 401k into IRA is reported to the IRS. You will receive a check and have 60 days to deposit it into another approved account. The new custodian will provide the necessary paperwork and it must be attached to your year-end tax returns. Your current custodian may be required to withhold a portion of the fund for tax purposes. That ruling seems to vary. From personal experience, they usually “ask” if you want a portion withheld, leaving the decision to you.

Transfers are not reported to the IRS, so there is less paperwork, but it does require that you choose a new custodian, first. That’s the second step.

The Second Step

 

Before you transfer or directly rollover 401k into IRA funds, you need to find a new custodial company. There are lots of companies out there and you should compare the investment options that they offer, as well as the fees that they charge.

Actually, you have already taken a smart step by learning how to rollover a 401k into an IRA, ahead of time. Now, you might want to learn more about the allowable investment options. Real estate, for example, is becoming increasingly popular choice for those that convert a rollover 401k into IRA accounts of the self directed type.

For your information, we are now offering one of the few real estate investments where the ROI is guaranteed, indeed the ROI is guaranteed to be at least double the return of your ROI from last year. That is not a typo, the ROI is guaranteed to be at least double the return of your ROI from last year. Please take a few minutes and check this investment out for yourself.

You probably see that how to rollover a 401k into an IRA is simple. Investing in real estate can be, too. If you have a few minutes to spare, please feel free to check out my website.

 

Dividing IRA Assets Upon Divorce

DIVIDING IRA ASSETS UPON DIVORCE

(Ed Hopper)

(Branch Operations manager)

(Raymond James & Associates, Inc.)

http://www.raymondjames.com/edhopper

ed.hopper@raymondjames.com

For many families, a significant portion of their wealth may be located within the couple’s individual retirement accounts (IRAs). Should the family unit break down, it is therefore important to have an equitable and easy method to divide and transfer assets. Division of retirement assets can be a sticky problem when left to the court system. Yet, once a decree of divorce or separate maintenance is entered, the transfer of IRA assets from one spouse to another should not add further difficulty.

When an interest in an IRA is to be transferred from one spouse to another under a court decree, the Internal Revenue Service has attempted to facilitate as easy a transfer as possible. This accommodating position is most likely in response to the level of divorce in today’s society. In general, the transferred interest in the IRA is viewed as the recipient-spouse’s property and, therefore, this conveyance is acknowledged as tax-free. The IRS also offers two basic transfer methods to help during such a trying time.

The most common method is the direct transfer. The IRA owner-spouse may order the IRA trustee to transfer the necessary IRA assets directly to the trustee of a new or existing IRA in the name of the recipient-spouse. Another alternative is to transfer the assets the owner-spouse is entitled to keep into another IRA, leave the necessary amount in the old IRA for the recipient-spouse and change the name on this old IRA to that of the recipient.

This renaming method taken to its extreme is the second alternative recognized by the IRS. If all the assets in the owner-spouse’s IRA are to be transferred to the recipient-spouse, a simple method of transfer is to just change the name of the account on the records of the financial institution. Sounds easy enough.

Given the inherent reporting problems, the sixty day rule, and the sometimes emotional environment of marriage dissolution, IRA rollovers are generally not permitted. Direct transfers by trustees are most often recommended. Of course, the most viable alternative will depend upon the particular situation and should be chosen with the advice of an attorney and financial advisor.

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