Where to put retirement money

Zeldman said:
If you-know-who is elected, then everyone will convert to agricultural banking in the middle of the night...
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Just getting your assets, and maybe yourself, out of the country might be a better choice. There are considerations beyond just financial.

My wife's talking about relocating to Costa Rica, but I was thinking Panama. Is one or the other better for aviation?
 
I have been to Costa Rica a few times. I really like the mountain area. I didn't see much of a general aviation community, but I might have been in the wrong part of the country.

I am looking at a couple of rural communities in British Columbia for possible relocation..er.. I mean retirement.
 
There is a lot of bad advice here for the OP, and a lot of wrong advice for the OP.

Your first question is a CUSTODIAL question. "Where to leave the assets?"

You have 3 options, generally.

  1. Leave them with your old employer. Nothing wrong with this option, and, many times your old employer will pay some of the management fees on the custodial aspects of the account. If the old employer's plan offers you good investments (diversified stock funds), this is a good option. Only downside is you might have multiple statements to keep track of your multiple locations of your accounts. Not a big deal.

  2. Move them to a Rollover IRA account that you (or someone else manages) at a place like Charles Schwab & Co. You submit the paperwork to Schwab, they go get the assets from your old employer, and then you pick your new investments, based on your risk tolerances (or ask them for information) and then you direct your own account. There generally aren't fees, and they offer tons of investment choices, including the diversified stock mutual funds that you should be selecting.

  3. Move them to your new employer's 401k program. If your new employer offers, this is sometimes a good option, as it gets you to 1 statement, and combines your retirement assets in one account. Caveat: You will have the same issue when you leave this employer, what to do with the funds.
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As for the Roth advice, you don't want to roll your assets from your old 401ks into a Roth account. Ignore that advice.
 
SixPapaCharlie said:
So I guess that begs another question. The 401 accts have grown in value consistently even though I'm not contributing. let's say I put $1 in an IRA, $1 in a 401k, $1 in a Roth IRA. And never touch them or added to it would one grow faster than the other?
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Depends on what assets they are actually invested in. The IRA vs 401k vs Roth question is about custodial management of the account and tax treatment, has nothing to do with actual investment performance.

For retirement accounts, you want your money invested in, pre-tax, allowed to grow without the income/growth being taxed, and then you will take your withdrawls later in life when your income (and tax bracket) is lower than your current, high-income, high tax-bracket situation.
 
Omalley1537 said:
Beanie babies, Chia pets, and those collectible coins on TV. But you better hurry, quantities are limited.
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There is acollection of Cabbage Patch dolls for sale. Every doll the company ever made. Can only go up, right? There is a couple that put all their retirement money into those dolls.
 
genna said:
Well actually no. With Roth you have 15%(from the example above) less money invested to begin with(given all other things being equal)

Basically if you have 10,000 Gross income that you want to invest. 15% taxes now and after retirement. 5% annual yeld. 30 years.

With Traditional: All 10,000 invested, value at 30 years: 44,677.44. Less 15% tax: 37975.824
With Roth: 10000 - 15%= 8,500 invested, value at 30 years: 37,975.83

Calculator: http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Same thing.
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Unless, of course, you believe that tax rates will be higher in the future. Which is not an unreasonable assumption if you will retire with a fair amount of money. Also look at the effect that social security and Medicare taxes have on things and where they expect to be in the future.
 
OkieFlyer said:
If you can swing it, buying property is always a good investment too. At least it is in my parts.
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My retirement accounts are pretty well on their way. I think this might be a good step for me to generate passive income. Do you think its better with single family houses (generally better payers, but more risk if they leave) or multi-tenant buildings (more turnover, less reliance on one rent check)?
 
charheep said:
My retirement accounts are pretty well on their way. I think this might be a good step for me to generate passive income. Do you think its better with single family houses (generally better payers, but more risk if they leave) or multi-tenant buildings (more turnover, less reliance on one rent check)?
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If you can find a decent commercial property, the renters usually stay a long time and pay on time. I have a piece that I own, but my dad rents out (long story) to a cell phone company, they pay on time, direct deposit every month! I get the tax bill, email it to them, they pay it right away. My luck with rental houses wasn't all that good, but I am too nice to people!
 
N747JB said:
If you can find a decent commercial property, the renters usually stay a long time and pay on time.
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Until they don't and all the contacts you had for your lessee go dark......

The downside with commercial property is that it truly depreciates. The 20 year old strip mall is worth less than the 3 year old strip-mall next door. Once your property houses a revolving cast of 'Victory Temple baptist church', Tattoo parlors and nail salons, you get to the point that just leveling it to stop the pain becomes and attractive option. Not every commercial landlord ends up as Donald Trump.

Real estate is a second job, not an investment.
 
weilke said:
Real estate is a second job, not an investment.
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This. Judging from what I have heard from other people, I would never be a landlord. Some like the idea, I don't.
 
weilke said:
Once your property houses a revolving cast of 'Victory Temple baptist church', ...
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Yea but its a great temp use for old movie theaters before you redevelop the property! :)
 
N747JB said:
If you can find a decent commercial property, the renters usually stay a long time and pay on time. I have a piece that I own, but my dad rents out (long story) to a cell phone company, they pay on time, direct deposit every month! I get the tax bill, email it to them, they pay it right away. My luck with rental houses wasn't all that good, but I am too nice to people!
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Somewhere, I once stumbled on a website/brokerage firm that specializes in commercial property for franchises and national chains.

You could buy bank buildings (think BofA, Wells Fargo, etc) and fast food chains (Jack in the Box, Carl's, etc...) and lease them back to the operators / banks.

I agree with the caution on rental houses. I have one that the guy is behind about $4000 to me (1160/mo rent), and, the wife is pregnant with 3rd kid, winter is coming on..... etc....
 
paflyer said:
I'm not considering a Roth. I'm self employed, and I can shelter a lot of income in a SEP. BTW, EVERYONE'S tax rates will go up if you-know-who is elected.
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Hillary isn't running on that. I have no idea what Donald is running on, but he's not going to get a congress to sign off on a tax hike on < $194'000 earners. Neither would Hillary for that matter even if she DID run on that.

The thing is - the far majority of Congress seats earn $174000. Except the leaders who earn $193400. "Coincidentally" the Roth IRA cutoff limit is $194000.
 
IRAs and 401ks are fine but if you want big investment returns you need to find a good ponzi scheme. The trick is to get in early when they're trying to prove to everyone the "investment" returns 30% a year and get out before it collapses. If you can't find one, we could start POA Investments LLC -- "we get huge returns purchasing drug dealer's former aircraft at government auctions and reselling them to pilots who all have wheelbarrows of money since they are pilots...."
 
Warren buffet is leaving his children his money invested in index funds. I agree. The average financial planner cannot compete with say vanguard. (I have great faith in this country. I'm staying. )
 
ColoPilot said:
IRAs and 401ks are fine but if you want big investment returns you need to find a good ponzi scheme. The trick is to get in early when they're trying to prove to everyone the "investment" returns 30% a year and get out before it collapses. If you can't find one, we could start POA Investments LLC -- "we get huge returns purchasing drug dealer's former aircraft at government auctions and reselling them to pilots who all have wheelbarrows of money since they are pilots...."
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Who flew in Barry seals beech 200?
 
I think 401k is a scam that mostly benefits the banks and Wallstreet. I put 60k into a 401k in my early twenties on the advice of a accountant 15 years later it has a balance of 64k. It was actually worth less than the principal amount put into in 2008. Thanks Wallstreet.

Without my single family real estate investments I would still be toiling away for the man. Although I am good at it, manage all the units myself including a good portion of the maintenance, and have a great eviction attorney. If you have to relay on property management and RE agents your yearly returns will be small if your lucky, but you can do well when you sell the units depending on your timing of the market.
 
Well, shucks. You have to have it invested right. An S&P index fund would have done much better than that.
 
Wade said:
I think 401k is a scam that mostly benefits the banks and Wallstreet. I put 60k into a 401k in my early twenties on the advice of a accountant 15 years later it has a balance of 64k. It was actually worth less than the principal amount put into in 2008. Thanks Wallstreet.
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But you're not supposed to invest everything at once and never again. You stand a chance of buying at the high point of the market, which you apparently did. The object is to invest over time so that sometimes you will be buying when prices are low.
 
Wade said:
I think 401k is a scam that mostly benefits the banks and Wallstreet. I put 60k into a 401k in my early twenties on the advice of a accountant 15 years later it has a balance of 64k. It was actually worth less than the principal amount put into in 2008. Thanks Wallstreet.

Without my single family real estate investments I would still be toiling away for the man. Although I am good at it, manage all the units myself including a good portion of the maintenance, and have a great eviction attorney. If you have to relay on property management and RE agents your yearly returns will be small if your lucky, but you can do well when you sell the units depending on your timing of the market.
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What year did you invest $60k?

Did you get a company match?


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It was 99 or 00 with Fidelity and I think 100% company match. I had a good portion in company stock and the company went under so that probably hurt it. I never even look at it other than the occasional statement when I feel like complaining about all the fees they charge.
 
Wade said:
It was 99 or 00 with Fidelity and I think 100% company match. I had a good portion in company stock and the company went under so that probably hurt it. I never even look at it other than the occasional statement when I feel like complaining about all the fees they charge.
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Who advised you on that allocation? Did you have to buy company stock? Was this Enron?
If you didn"t pay attention to your rentals they wouldn't perform either.
 
JoseCuervo said:
What year did you invest $60k?

Did you get a company match?


Sent from my iPhone using Tapatalk
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And what were the fees? That's why Vanguard is the way to go, some mutual funds charge 2% or more, on top of that the plan administrator may charge more.
 
If it was worth as much as my rentals I would pay more attention. I think the match was company stock (Micron PC) only if I remember correctly that was a long time ago.

Im a simple buy it fix it sell it kinda guy so I prefer to trade tangible assets for cash rather than sit at the computer trading paper online. I don't know how to talk people into giving me their money to use to invest and then charge them a fee even if I lose it. It's sounds like good work if you can get it.
 
I have an old Roth IRA lying around that I can no longer contribute to. Is there anything that should be done with it, or just leave it alone?
 
GeorgeC said:
I have an old Roth IRA lying around that I can no longer contribute to. Is there anything that should be done with it, or just leave it alone?
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What are the fees compared with an outfit like Vanguard ? You may do better by changing to a custodian with lower fees (rolling your Roth into a Roth with a different company).

Has it performed like you want it to ? If not, either re-balance things within the plan or as part of a rollover to a low-fee custodian.

Other than that, yes, let it sit and revisit it when you are 75 and itching to buy a plane.
 
Wade said:
If it was worth as much as my rentals I would pay more attention. I think the match was company stock (Micron PC) only if I remember correctly that was a long time ago.
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Get a copy of the plan documents to see how long you have to own the company stock before you can take your money somewhere else. As this is a former employer, consider rolling it over into an IRA with a different custodian and spread it broader to reduce the risk of a crash in a single sector damaging you.
 
weilke said:
What are the fees compared with an outfit like Vanguard ? You may do better by changing to a custodian with lower fees (rolling your Roth into a Roth with a different company).

Has it performed like you want it to ? If not, either re-balance things within the plan or as part of a rollover to a low-fee custodian.
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IIRC, it's in a relatively low fee target date fund. Regardless, it might be worth moving it to Vanguard if only to have it under the same roof as my 401k.

Other than that, yes, let it sit and revisit it when you are 75 and itching to buy a plane.
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You misspelled 59 1/2...
 
GeorgeC said:
IIRC, it's in a relatively low fee target date fund. Regardless, it might be worth moving it to Vanguard if only to have it under the same roof as my 401k.
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Just look at the numbers. If the current custodian isn't pilfering your money for doing nothing, there is little reason move it.

You misspelled 59 1/2...
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Depends on your tax situation at that point. Drawing money from a Roth makes sense if you are still in a higher tax bracket (or at a point where drawing from a 401k or classical IRA would bump you into a higher one). One of the good things with a Roth is that you don't have to withdraw, so all tax consequences being equal, letting it sit for later in retirement can be a good option.
 
Wade said:
Im a simple buy it fix it sell it kinda guy so I prefer to trade tangible assets for cash rather than sit at the computer trading paper online. I don't know how to talk people into giving me their money to use to invest and then charge them a fee even if I lose it. It's sounds like good work if you can get it.
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I don't think anyone is trying to talk you into a second career as a money manager. All people are saying is that if you are not someone who wants to pay much attention to your investments, get a broad market index fund or a target date fund. It also is good to add to your investment regularly, not just when the market is doing well. What you did to your old 401(k) would be equivalent to you buying a property 15 years ago, never maintaining it, and not keeping track of whether or not your tenants were paying rent.
 
Everskyward said:
I don't think anyone is trying to talk you into a second career as a money manager. All people are saying is that if you are not someone who wants to pay much attention to your investments, get a broad market index fund or a target date fund. It also is good to add to your investment regularly, not just when the market is doing well. What you did to your old 401(k) would be equivalent to you buying a property 15 years ago, never maintaining it, and not keeping track of whether or not your tenants were paying rent.
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Your old 401(k) had some problems that weren't really the fault of 401(k) in general, just yours in particular. I also used to work for a company that matched with company stock. It was my good fortune that my company stayed in business, unlike others. Otherwise I would have lost whatever value my company match was worth. I can't remember, but I don't think we were allowed to convert that stock to cash until it had been in the account for some number of years.

Your own deposits may or many not have had very many investment options. I think we could put our donations into company stock (then, with a match of stock, we'd really run the risk of losing everything by having all our eggs in one basket), or some conservative mutual finds. And like mentioned above, dollar cost averaging on a consistent basis into an indexed fund will make a big difference in value after a couple of decades.
 
Aircraft, women and booze. Hunting/fishing trip occasionally for a little variety. Save just enough for booze so you can make it through the last bit when you can't do anything but sit around drinking telling stories about all the flying ****ing and fun you've had.
 
Tarheelpilot said:
Aircraft, women and booze. Hunting/fishing trip occasionally for a little variety. Save just enough for booze so you can make it through the last bit when you can't do anything but sit around drinking telling stories about all the flying ****ing and fun you've had.
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I'm sure that was tongue in cheek, but some people actually think that way. The problem comes when all the booze and other "fun" catches up with you decades before you actually die. I know a few people who are living far, far longer than they ever thought they would. 90 years old, out of money and in poor health (but still not dying) is not where I want to be. So the people who pay attention to their money, live responsibly and still have some fun while they can are not quite the dumb suckers that the party people try to make them out to be.
 
GeorgeC said:
I have an old Roth IRA lying around that I can no longer contribute to. Is there anything that should be done with it, or just leave it alone?
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Everyone is busy beating up the guy who lost his own money and missed this.

Generally you can just leave it alone if the place that is holding it has reasonable investments for you to use inside of it. If they don't, you can move it. Or if you like all your accounts at the same place. Just do the move by the book so it doesn't get to where it looks like you made a withdrawal.

It'll give you an option later if you have things that would be taxed when withdrawn in retirement and the Roth. You get to choose when you pay taxes by choosing what you'll withdraw from.
 
weilke said:
Real estate is a second job, not an investment.
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Say amen to that, brothah.

I am counting the days until I sell my rental property. It's an older home (1946 Craftsman, with a second mother-in-law house behind) and there's always some $3000-$10,000 surprise at least every other year...for 2016 it was major sewer line replacement because tree roots had thoroughly clogged all the ancient clay pipes. At least the tenants pay more or less on time...with gentle prompting.
 
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