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Hi Taylor
- I'm leaving my job where I've got a fully vested 401(k) and wondering
where I should roll the money. I know I want an IRA, but how do I
pick the provider? - Don
Hi Don - Great question, and glad you got that 401(k) vested!
You're going to have endless IRA options - lots of those options are
great, many are not. My advice is to find a company you like that
doesn't charge relentless fees, and here are a few ways to go about
finding such a company. |
1. Ask
about fees before you do anything else. Naturally, banks and
mutual fund companies want to talk about everything other than
what they charge when luring new clients. That's why you should
start with these questions and fight to get straight answers.
Lots of brokerage firms have very few extra fees (probably fewer
than your old 401(k) provider) and they'll be happy to promote
that. Other companies charge trading fees, fund manager fees,
advisor fees and pretty much any other noun you can put in front
of the word "fee." If an account manager has a pitch that sounds
too good to be true and then you see some strange numbers in the
fine print, you probably don't want your money with that company.
2. Think about how you want to invest. You can take a lot
of control over your IRA. Some people love that option, other
people don't trust themselves to make the right financial choices.
You might spend a little to have someone build an investment strategy
for you, which can cost more up front but deliver far better returns
than a standard mutual fund. There are big insurance and brokerage
firms that have been offering IRAs forever and sometimes get a
little impersonal in their strategies. Other companies do a much
better job of trying to meet your individual needs and goals.
If there are stocks and commodities that interest you, pass that
info along to your advisor or broker to make sure everyone is
on the same page. It's your money and you should have a say in
how it gets invested.
3. Ask around. When you open an IRA, you give someone else
the chance to make money off of your money. This means everyone
wants to have your account, and they will make it sound like a
very, very smart choice for you to invest with them. If you aren't
sure who to trust, ask some friends who have investment accounts
and see how their funds are doing. Compare stories and see how
you feel about different companies and advisors after hearing
from average investors like yourself who are just trying to save
for retirement.
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To dig a little
deeper, head to NerdWallet or another financial review site and get
specifics about the fees different companies charge. Having a frame
of reference will make it easier to sort through the options. Happy
investing, Don!
© Taylor Kovar
October 26, 2018
More "Go Far With Kovar"
Disclosure: Information presented is for educational
purposes only and is not an offer or solicitation for the sale or
purchase of any specific securities, investments, or investment strategies.
Investments involve risk and, unless otherwise stated, are not guaranteed.
Be sure to first consult with a qualified financial adviser and/or
tax professional before implementing any strategy discussed herein.
Past performance is not indicative of future performance. To submit
a question to be answered in this column, please send it via email
to Question@TaylorKovar.com,
or via regular mail to Lessons on Wealth, 106 E Lufkin Ave., Lufkin,
TX 75901. |
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