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Where to reinvest our 401K Rollover

My husband's company was bought out and now we need to reinvest our 401K. Investing with our new company's 401K program is an option, but they are not matching contributions, so we are looking at other options. A Roth IRA looked good (pay as you go taxes) until someone suggested paying taxes on a $32,000 rollover might be cheaper when we're older. My bank suggested CD's @ 1.2%. Ick. Money market is like .0001%. My ex-broker is not an option...I've lost so much money listening to him that I'll stuff all our cash in a mattress before I trust him again. We are 54 and 61 years old, and can't afford to lose another dime of our retirement. But I'd like to get more than 1.2% or .0001%. Any ideas on what to do with this 401K?

Asked on Feb 3, 2010Improve / edit this question

3 Answers

Sam Montana   L6: Pro (Ambassador: L2)   1,851 answers   +1,347 votes
This answer has +1 votes  by

There aren’t many great places to put money at this time. And there is still a ton of uncertainty and no trust. I have been looking at this same question. The old saying is that you will probably be in a lower tax bracket when you are older. I am even unsure of that anymore with the huge deficit, knowing taxes will have to be raised.

I am guessing you no longer have a choice of mutual funds from which to choose. You could ladder CDs and get a slightly higher rate. For example put some money into a 6-month and some into a 9 month, some into a 12 month and so forth. Bankrate.com has a calculator for laddering CDs. You don’t want to go too far out since who knows when these rates might start going up again to a decent level. Bankrate also has many other calculators including choosing a Roth or traditional IRA.

I have also been hearing a lot of fairly smart people putting their money into an intermediate bond fund from PIMCO. PIMCO Total Return D Class and the symbol is PTTDX. No load and the minimum amount is $1,000. Many people have PTTRX as a choice in their 401k plans but not for individuals because the initial amount for that one is $500,000, so don't get them confused.
 

Posted on Feb 3, 2010
Darrel Hammon   L2: Contributor   60 answers   +40 votes
This answer has 0 votes  by

Check with your local accountant who will have great suggestions.

Posted on Jan 3, 2011
Page Coleman   L2: Contributor   71 answers   +57 votes
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Maybe check with friends to see if any have a financial planner they recommend. 

Posted on Jan 5, 2011

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