Left UPS keep 401k with compay?

Discussion in 'UPS Retirement Topics' started by BraBear86, Jan 17, 2013.

  1. BraBear86

    BraBear86 New Member

    I recently left UPS after 8 years (4 years pkg handler, 4 years supervisor) for my new employer. I had my 401k for the last 4 years as a sup. Should I leave my 401k at UPS or should I transfer to an IRA. What are the pros/cons of both? My new employer has no 401k options at my level. Thanks
     
  2. pretender

    pretender Active Member

    If you have the money to pay the tax, you could roll it over to a Roth IRA.
     
  3. raceanoncr

    raceanoncr Well-Known Member

    As a former supe, what will the company let you do? I don't know. Is it the same as hourly? Finding that answer is kinda gonna determine what you do. But say they'll let you stay there. As a 2-yr retiree (grunt) I chose to leave mine in Prudential, they same as when I was working. Why?

    My financial guy wanted me to roll it over to something he had. He swore he could do better. I got out statements and in print was expense ratio. I forget what it was now, I could look it up, but he was stunned. He said he COULD NOT do better than this and to leave it there.

    This last statement, I earned between 17-20% on all funds I divested in. Sure, I'll hafta pay tax on that when I absolutely have to but it will be a lower tax because of being in lower tax bracket than when I was working, about 15% compared to 35%.

    My Roths? Earning about the same. The diff here, of course, is that you don't pay taxes on earnings when you withdraw. Now, do you want to pay penalty for withdrawing 401 just to put it in Roth? Your choice, I guess. This is just what I did and it's working.
     
  4. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    My financial guy is a planning on me rolling over my traditional 401k to a traditional IRA upon retirement. Swears he can do better. We'll see.
     
  5. oldngray

    oldngray nowhere special

    Once you leave a company you should roll over your 401k to a new plan. Which plan is best for you depends on your individual situation. I rolled mine over into a traditional IRA. Roth IRA is another good option or another 401k from someone else are other possibilities.
     
  6. Jones

    Jones fILE A GRIEVE! Staff Member

    I would get a second opinion. Like Race said, our expense ratios are waaay lower than anything your financial guy will be able to find on the open market and most managed funds fail to beat the indexes over the long haul anyway. If he's telling you that he can do better I suspect that's exactly what he means, ie, he can do better because he'll be making more commission.
     
  7. Monkey Butt

    Monkey Butt You can call me Chappy Staff Member


    Go talk to a Pay Fee Financial Adviser.
    An Edwards Jones guy is banking on you moving money out so he can make money.

    Pay the $400 - $1200 for a fee based person to objectively evaluate your situation and recommend approaches.
     
  8. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    My Edward Jones guy has been very straightforward regarding the fees and commissions. I pay an annual $40 fee to have an account. The maximum sales charge is 5.75% (3.5% for balances over $100K) for Class A shares.

    I have 6 years to make this decision. We have already rebalanced the 401k for 2012 and will do so again in 2013. There is no charge for doing this. We'll see how these annual rebalances work out before I make my decision. It would be nice to have someone else take care of this for me; however, if I can learn more about this I am sure that I could do it myself and save the commissions.
     
  9. Ms.PacMan

    Ms.PacMan Well-Known Member

    The 401k fees for the funds are rock bottom. But there is a $23.50 yearly administration fee and a $10 fee for distributions. Quarterly distributions would then add another $40/yr and a whopping $520/yr for weekly distributions.
     
  10. Jones

    Jones fILE A GRIEVE! Staff Member

    What's your criteria for these re-balances being a success?
     
  11. pretender

    pretender Active Member

    My criteria for for success is that rebalancing refocuses your funds back to the original intent of your allocations. A side benefit is that in doing so, you are buying low and selling high.
     
  12. Jones

    Jones fILE A GRIEVE! Staff Member

    I dunno Dave, that sounds like something your broker told you. What you should do is compare your returns over the last year to what they would have been if you hadn't re-balanced. Or just compare them to what they would have been if you left everything in the S&P 500 index (which also has the lowest expense ration). There are good reasons for re-balancing, but I bet what your guy is doing is just getting you in the habit of re-balancing every year so that once you roll everything over into his account he can really start cleaning up.
     
  13. pretender

    pretender Active Member

    I was not speaking for Dave--That was just my opinion on how I handle my Self Managed 401K...
     
  14. Jones

    Jones fILE A GRIEVE! Staff Member

    Whoops, sorry about that. I asked Dave a question, you replied, and I got all confused :happy-very:. You got an SMA, you know what you're doing, carry on...
     
  15. raceanoncr

    raceanoncr Well-Known Member


    OK, so please explain to me, cuz I'm pretty stupid, why "once you leave a company you should roll over your 401K to a new plan". I ask this, cuz I've already stated here, on this post, how my plan is really working for me, since I retired. Even tho, my "expert" outside financial guy said he could do better and, upon examination, he humbly stated he was wrong, he could not.

    I'm making good returns, low fees and no hassle. Again, not being antangonistic here just wondering what reasoning you're using to say that we "have to" roll over.
     
  16. oldngray

    oldngray nowhere special

    I combined my UPS 401k, another IRA, and my other investment accounts all to the same bank. I get lower fees and the higher balances make me a prefferred customer where I also get several free extra perks. And I have the flexibility to invest however I feel like and its much simpler for me to manage my accounts all from the same bank. I did diversify and moved more money into bonds and did other things to manage my account. I did mostly have my money in the S&P index fund at UPS and while it did perform well, I was paying maintenance fees for an unmanaged index fund. And I pay lower fees now.
     
  17. Jones

    Jones fILE A GRIEVE! Staff Member

    The expense ration on the S&P 500 index in the 401k is .01%. If you've got a better deal through your bank I'd like to hear the details, ie, which bank is it and how much do they charge?
     
  18. oldngray

    oldngray nowhere special

    The S&P 500 is a great index fund and that's not the issue. Its the administrative fees charged by the UPS 401k plan. A lot of that is for the convenience of payroll deduction and similar details, but if you are no longer contributing more then a 401k loses its attractiveness and an IRA looks better. I have some of my IRA in an S&P 500 fund now. I still like it but I did diversify more but that was just a personal choice and I'm not saying its the best for everyone.