B-Large Posted February 27, 2014 Share Posted February 27, 2014 this topic didn't really fit elsewhere, so I thought I might place it here and if it need moved, so be it. My wife has 4 qualified plans that remain at past employers, 403b's I believe, and I have asked her for years to roll them over, research how to do that, etc... shocker, she has never done it. But now that she is self employed, what is the range of options for a new retirement account, and what do most sole proprietors do? Also, can you roll over old qualified retirement accounts into a new individual IRA and continue to build the balance? I have thought about having a financial planner, but most of our assets are tied in physcial real estate and I haven't really met with a Planner who adds much value to that. We just want to make sure we are saving not only in real estate, but in some retirement accounst as well. Thoughts are appreciated. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted February 27, 2014 Share Posted February 27, 2014 Without knowing far more about your finances and goals, it's impossible to say. You should speak with your accountant. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 27, 2014 Share Posted February 27, 2014 PM me. Link to comment Share on other sites More sharing options...
B-Large Posted February 27, 2014 Author Share Posted February 27, 2014 PM me. thank you Chef, I will Link to comment Share on other sites More sharing options...
ICanSleepWhenI'mDead Posted February 28, 2014 Share Posted February 28, 2014 Thoughts are appreciated. 1. First, a few links from reputable sources to give an overview of retirement plan options for the self-employed: http://www.irs.gov/Retirement-Plans/Retirement-Plans-for-Self-Employed-People http://www.kiplinger.com/article/saving/T047-C001-S003-best-ways-for-the-self-employed-to-save-for-retire.html?si=1 http://money.cnn.com/retirement/guide/selfemployment_basics.moneymag/index.htm http://www.forbes.com/sites/kerryhannon/2011/04/01/the-best-retirement-plans-for-the-self-employed/ [info is about 3 years old so read for background but update before relying on it] 2. Info on rollovers from 403(b) account to an IRA: http://ctainvest.org/home/403b-457-Plans/403b-457-overview/Roll-Over-Your-403b-or-457-or-Leave-It-With-Your.aspx http://www.403bwise.com/wisemoves/irarollover_vt.html 3. Rolling over old 403(b) accounts into a single new IRA creates administrative convenience, and allows a wider range of potential investments than the typically limited choices offered by each 403(b) plan's administrator. But I am aware of one downside. I think I have read (not certain, and unfortunately no link) that existing 403(b) accounts with a former employer can sometimes be rolled into a new employer's 403(b) if the new employer's 403(b) plan documents allow this. I'm not sure you could do that if funds had been rolled over into an IRA first. When your wife eventually wants to take money out of her retirement account, 403(b) plans have slightly different rules than IRAs for penalties on early withdrawals. If your wife separates from her then employer's service after turning 55, she can withdraw funds from a 403(b) plan without paying the 10% IRS premature withdrawal tax. If the money has been rolled over into 1 or more IRAs, withdrawals before age 59.5 are subject to the same 10% IRS penalty. The added convenience and increased investment options may be worth more to you than the possibility of withdrawing money without penalty a few years sooner, but you should be aware that you are making that potential trade-off (which only comes into play if she ever goes back to work for an employer with a 403(b) plan). 4. One final thought that many people who have a 403(b) at work don't know - - the IRS allows contributing the same annual maximum to both a 403(b) plan and a 457 plan in the same tax year. This allows you to make double the maximum annual tax-deferred contribution compared to what you could make to a 403(b) plan alone. Sounded too good to be true when I first read about it, but I have confirmed it with several sources. Here's a couple: http://www.403bwise.com/participants/getwise_403b_another.html http://money.cnn.com/retirement/guide/401k_457plans.moneymag/index2.htm [based on 2011 contribution limits] 5. Be aware that whatever type of retirement plan your wife may set up for her self-employed business, she should not purchase tax free investments with funds already in that tax-deferred account. I have seen a financial advisor recommend such a strategy because he merely wanted to get the higher commission available to him from selling a tax sheltered annuity product. 6. Probably more than you wanted to know, but hey, you asked . . . Link to comment Share on other sites More sharing options...
KD in CA Posted February 28, 2014 Share Posted February 28, 2014 I'm always amazed as how many people seemingly just forget about their 401(k) balance when they leave a company. There are people in our Company's plan that haven't worked here in as much as ten years. Link to comment Share on other sites More sharing options...
Tiberius Posted February 28, 2014 Share Posted February 28, 2014 I'm always amazed as how many people seemingly just forget about their 401(k) balance when they leave a company. There are people in our Company's plan that haven't worked here in as much as ten years. Well if people paid more attention it would be harder for the brokers to leach all those fees and charges out of their clients and they might have to provide information on the investments that actually made sense... Link to comment Share on other sites More sharing options...
KD in CA Posted February 28, 2014 Share Posted February 28, 2014 Well if people paid more attention it would be harder for the brokers to leach all those fees and charges out of their clients and they might have to provide information on the investments that actually made sense... Yes, that's right. Those of us that pay attention don't let that happen; our brokers all work for free and provide clear and comprehensive investment information. Of course, we actually have to read the information which is pretty difficult since the government isn't reading it for us, but we struggle by. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 28, 2014 Share Posted February 28, 2014 1. First, a few links from reputable sources to give an overview of retirement plan options for the self-employed: http://www.irs.gov/R...Employed-People http://www.kiplinger...etire.html?si=1 http://money.cnn.com...eymag/index.htm http://www.forbes.co...-self-employed/ [info is about 3 years old so read for background but update before relying on it] 2. Info on rollovers from 403(b) account to an IRA: http://ctainvest.org...-With-Your.aspx http://www.403bwise....ollover_vt.html 3. Rolling over old 403(b) accounts into a single new IRA creates administrative convenience, and allows a wider range of potential investments than the typically limited choices offered by each 403(b) plan's administrator. But I am aware of one downside. I think I have read (not certain, and unfortunately no link) that existing 403(b) accounts with a former employer can sometimes be rolled into a new employer's 403(b) if the new employer's 403(b) plan documents allow this. I'm not sure you could do that if funds had been rolled over into an IRA first. When your wife eventually wants to take money out of her retirement account, 403(b) plans have slightly different rules than IRAs for penalties on early withdrawals. If your wife separates from her then employer's service after turning 55, she can withdraw funds from a 403(b) plan without paying the 10% IRS premature withdrawal tax. If the money has been rolled over into 1 or more IRAs, withdrawals before age 59.5 are subject to the same 10% IRS penalty. The added convenience and increased investment options may be worth more to you than the possibility of withdrawing money without penalty a few years sooner, but you should be aware that you are making that potential trade-off (which only comes into play if she ever goes back to work for an employer with a 403(b) plan). 4. One final thought that many people who have a 403(b) at work don't know - - the IRS allows contributing the same annual maximum to both a 403(b) plan and a 457 plan in the same tax year. This allows you to make double the maximum annual tax-deferred contribution compared to what you could make to a 403(b) plan alone. Sounded too good to be true when I first read about it, but I have confirmed it with several sources. Here's a couple: http://www.403bwise....3b_another.html http://money.cnn.com...ymag/index2.htm [based on 2011 contribution limits] 5. Be aware that whatever type of retirement plan your wife may set up for her self-employed business, she should not purchase tax free investments with funds already in that tax-deferred account. I have seen a financial advisor recommend such a strategy because he merely wanted to get the higher commission available to him from selling a tax sheltered annuity product. 6. Probably more than you wanted to know, but hey, you asked . . . Good job of completely confusing him. Well if people paid more attention it would be harder for the brokers to leach all those fees and charges out of their clients and they might have to provide information on the investments that actually made sense... Yup and everyone has time to pay attention to what their "broker" is doing. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted February 28, 2014 Share Posted February 28, 2014 Yes, that's right. Those of us that pay attention don't let that happen; our brokers all work for free and provide clear and comprehensive investment information. Of course, we actually have to read the information which is pretty difficult since the government isn't reading it for us, but we struggle by. Yup. Free brokerage service is the way to go, especially knowing that you get the service you pay for. Wouldn't want anyone to be compensated for their work. Link to comment Share on other sites More sharing options...
Tiberius Posted February 28, 2014 Share Posted February 28, 2014 http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?pagewanted=all&_r=0 Yup. Free brokerage service is the way to go, especially knowing that you get the service you pay for. Wouldn't want anyone to be compensated for their work. Or their corruption Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted February 28, 2014 Share Posted February 28, 2014 http://www.nytimes.c...wanted=all&_r=0 Or their corruption That's not corruption. It's unsubstatiated claims of poor business practices. And it's one company out of thousands. Link to comment Share on other sites More sharing options...
ICanSleepWhenI'mDead Posted February 28, 2014 Share Posted February 28, 2014 Good job of completely confusing him. I realized a long time ago that information is power. I made it available from reliable sources rather than from an anonymous avatar with multiple brothers named Darryl. What he does with the info, or if he even reads it, is up to him. He can rely on the financial advice of others on a mainly football message board if he chooses, but some people don't want any advice . . . Link to comment Share on other sites More sharing options...
KD in CA Posted February 28, 2014 Share Posted February 28, 2014 Yup. Free brokerage service is the way to go, especially knowing that you get the service you pay for. Wouldn't want anyone to be compensated for their work. Unless they work for the government. In fact, it would be better if the government just took over all the brokerage services. That way all investors would have a level playing field. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 28, 2014 Share Posted February 28, 2014 I realized a long time ago that information is power. I made it available from reliable sources rather than from an anonymous avatar with multiple brothers named Darryl. What he does with the info, or if he even reads it, is up to him. He can rely on the financial advice of others on a mainly football message board if he chooses, but some people don't want any advice . . . Yes but some are qualified to give that advice and provide advice that fits their exact situation. Link to comment Share on other sites More sharing options...
ICanSleepWhenI'mDead Posted February 28, 2014 Share Posted February 28, 2014 Yes but some are qualified to give that advice and provide advice that fits their exact situation. Where are all the customer yachts? Link to comment Share on other sites More sharing options...
Tiberius Posted February 28, 2014 Share Posted February 28, 2014 That's not corruption. It's unsubstatiated claims of poor business practices. And it's one company out of thousands. One company? Ya, one of the giants. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 28, 2014 Share Posted February 28, 2014 One company? Ya, one of the giants. What's your point? Link to comment Share on other sites More sharing options...
IDBillzFan Posted February 28, 2014 Share Posted February 28, 2014 What's your point? The same point he is always making: that once again the world would be a glorious place if only the government ran everything. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 28, 2014 Share Posted February 28, 2014 The same point he is always making: that once again the world would be a glorious place if only the government ran everything. Got it. Thanks, carry on. Link to comment Share on other sites More sharing options...
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