Rollover IRA
REM #F696
By Ilyce R. Glink
Summary: A reader has recently learned that they are being laid off after 16 years of service. Ilyce gives him advice on how to select and rollover his IRA.
Q: I am only 39 years old and after 16 years of service I have been declared
surplus by SBC and need to roll my pension into another account.
Are all traditional IRA's the same, or do different institutions offer different things? What should I look for, and/or watch out for?
A: I'm sorry that you're going to lose your job. That's a tough thing to go
through after 16 years with the same company.
What you'll want to do with your IRA is to open up another account and then
have that account request an electronic rollover from your old account. That
way, you won't touch the cash, and you won't have anything taken out from the
account.
Once the cash is in the IRA, you'll have to decide where to invest the money.
And, that's where choosing the right investment company can come in handy.
My suggestion is to open up your account at either Fidelity Investments, Vanguard,
Charles Schwab or Merrill Lynch. All of these companies offer low trading rates
and a wide variety of investment options with low fees.
If you're interested primarily in index funds, Fidelity has the least expensive
index funds (charging one-tenth of one percent) and Vanguard's index funds are
nearly as cheap.
Wherever you go, be sure you understand how much the basic account will cost
you each year (for many of these companies, it's free or $30 per year), and
how much each trade will cost. Finally, be sure you read the prospectus or check
out www.morningstar.com to understand
what companies each fund invests in.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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