Ask MetaFilter questions tagged with finance and 401k

Can I use a retirement fund to buy out startup stock options?

Anonymous — Tue, 17 Nov 2009 19:25:12 -0800

I'm about to leave a startup to go to a different company, and I need some help figuring out how to handle my stock options. I currently work for a startup at which I have accrued X stock options at a price of $Y. From the date I leave, I have 90 days to buy out the options. I don't currently have the cash on hand to do this, but I do have approximately X*$Y in my 401k, which I would have to roll over either to the new company's 401k or to an IRA.

I think I heard that you can buy out options like this in a retirement fund, but if this is true I need to better understand the details and mechanics of it. Is anyone familiar with this situation who can tell me what to look for? Are there specific types of IRAs or anything like that which would give me more flexibility? What do I need to know?

For what it's worth, I do believe the startup will succeed; I'm leaving because my job there is not what I want. Also, I'm in my mid-twenties. So I am not concerned about using my (currently minimal) retirement fund to buy these out.

To Roth or not to Roth?

gnash — Mon, 09 Feb 2009 12:06:36 -0800

Should I convert my Traditional IRA to Roth IRA now or ever? What are the criteria for moving from a Traditional IRA to a Roth IRA? Is it something people suggest? Given the market downturn it seems like it might be good timing to make such a move, but the feedback I have been given is mixed, so I humbly turn to the hive mind for answers.

For arguments sake say I have over $100k and I am 30 years away from retirement. I anticipate at least 6% return a year average but believe it will be higher given history and other factors.

Picking the right solo 401k provider

gsh — Mon, 17 Nov 2008 16:55:44 -0800

How should I evaluate prospective solo 401k providers? I have recently become an independent contractor and I'm in it for the long haul. I've done the reading about IRAs vs. solo 401k and the latter is for me: it will allow me to contribute much more money for my retirement.

Now, to pick a provider! On what criteria should I compare them?

Financial / 401k advice for a 23-year-old engineer.

decrescendo — Tue, 01 Jul 2008 06:26:06 -0800

Financial / 401k advice for a 23-year-old engineer. Considering the state of the economy and the price of oil, what should I do with my stocks. Also, I have the option for a 401k but I have no idea what type of 401k to choose. I have around 30k in McDonalds stock that is up 80% from when it was bought for me when I was a kid. Should I hold onto it and weather the storm? I keep reading rumblings of a recession and stock market crash but is that just a scare tactic? I don't want to get kicked back down to a 30% gain on that stock when it's been doing so well up until right now. It has defintely been a long-haul stock but I'm afraid I'm going to lose all that I've built up over the last 23 years.

Also, I've had the opportunity to enroll in a 401k from my company for the last 6 months. I haven't done it yet mostly because I have no idea what to fill out on the form. I have the following options. Any recommendations? I believe my company matches up to 15%.

Should I go with option 1 or option 2?

1. I elect to contribute ____% or ____$ (per pay period) of my compensation as before-tax contributions to the 401(k) Plan until
such time as I revoke or amend my election.

2. I elect to contribute ____% or ____$ (per pay period) of my compensation after-tax as a designated Roth contribution to the
401(k) Plan until such time as I revoke or amend my election.

Note: The total of your before-tax and Roth deferrals cannot exceed 100% or $15,500.00. Your before-tax and Roth deferrals must be specified consistently (both as a percent or both as a dollar amount). If I am 50 years of age or older and I am eligible for a catch-up contribution, I understand I may exceed this total.

I also have all of these to pick from. No idea what to go with here. Considering the economy and what I hear, I'd probably rather take a semi-conservative approach.

Maxim Aggressive Profile II
Maxim Moderate Profile II
Maxim Conservative Profile II
American Funds EuroPacific Growth R3
Oakmark International II
Oppenheimer Global A
First American Small Cap Select A
MainStay Small Cap Opportunity A
Maxim Index 600
RidgeWorth Small Cap Growth Fund I
Lord Abbett Mid-Cap Value A
Maxim Ariel Small-Cap Value
Fidelity Advisor Mid Cap T
Fidelity Advisor Leveraged Co Stk - T
American Funds Growth Fund of Amer R3
Davis NY Venture R
Marsico Focus
Maxim S & P 500 Index
Maxim T. Rowe Price Equity Income
Oppenheimer Capital Appreciation A
RiverSource Diversified Equity Income R3
Van Kampen Comstock - R
Maxim Bond Index
Maxim Loomis Sayles Bond Portfolio
Maxim US Government Securities Fund
PIMCO Total Return Admin
Guaranteed Certificate Fund 36 Month
Guaranteed Certificate Fund 60 Month
Guaranteed Certificate Fund 84 Month
Maxim Money Market

Any help would be fantastic.

Why can't I close out and withdraw from my 401k? Any way out?

Anonymous — Mon, 09 Jun 2008 19:02:16 -0800

I want to close out my 401k (and pay the necessary taxes) so I can pay off some debt. My 401k says I'm not allowed. Why not? Can I change anyone's mind? I have relatively minor credit card debt n. I have meager 401k savings n. (I am only 23). I would like to pay off my credit card, and be putting the money I'm currently putting toward monthly credit card payments toward more immediately accessible savings. Additionally, my company has as of last month decided to start matching 401k contributions, so I'd rather be putting matched money in than letting the $n sit there doing not much in the stock market while I continue to accrue credit card interest. However, I can't put money in until I'm not worried about paying off credit cards.

So I called my 401k people (Fidelity) to ask to take the withdrawal. They said I can't. I said, are you seriously telling me I can't have my money? And they said that since I'm still at my current company, I can't do anything with it until I'm fired or leave voluntarily. I've got a while before I'm planning on either of those. What the hell? It's my money, isn't it? We wants it :(

The other option is to take out a loan, but I'm only eligible to take out loan n/2, and paying back loan + interest plus paying off the other half of credit card debt won't really solve my problem. My goal is to wipe out the debt, be able to start contributing small (matched) amounts to retirement, and separately do a better job of keeping an accessible savings account with monthly contributions.

So, question 1: Why can't I take out my money? What's the reason behind this? And is it likely that by arguing in a different way I could get it? I'm fully aware of and willing to pay the necessary taxes if they'll just let me get at the money.

Question 2: Any other options for what I'm trying to do?

(Anonymous because I don't want this connected to the real name I use on here)

So happy about the 401K until...

kookywon — Fri, 15 Feb 2008 13:28:59 -0800

Did my 401K just blow my IRA deduction out of the water? This question is stumping my HR and my financial adviser. I was a consultant for 2007 until December. I was diligently squirreling away my monthy contribution of $333 so I would be able to deduct the max $4000 at the end of the year. However, I started a new job as a FTE and my paycheck for December enrolled me in the company 401K. When I fired up my TurboTax it said that I was unable to deduct the IRA because I was in a 401K for the year and my MAGI(?) had exceeded the allowance for that deduction. Do I have any recourse? Or do I just leave the money in the IRA as undeducted?

You take the high load, I'll take the low load

doctorcurly — Tue, 15 May 2007 10:38:15 -0800

My 401k retirement plan through the company I work for is managed by Fidelity Investments. I have read recently that a "high-load" mutual fund will often return poorer yields than a "low-load" or "no-load" mutual fund. How do I find out if my plan is high-load, low-load, or no-load?

Investment options when you don't have a 401k?

xmutex — Wed, 24 Jan 2007 11:37:58 -0800

My new job is a start-up, and they don't offer 401k. What are my investment options? I already have a Roth IRA to which I am contributing the max per year.

401(k) employer matching

blue_wardrobe — Thu, 18 Jan 2007 06:06:05 -0800

When must an employer deposit their matching funds in a 401(k) account? I understand that employee contributions must be deposited "as soon as possible", but what about the employer's matching?

how do I calculate my 401K return?

dy — Tue, 10 Oct 2006 11:20:49 -0800

I've been scratching my head this whole morning, trying to figure out how my 401K is doing, my own account per se. The personalized rate of return on my statement takes into consideration other factors that don't really apply to me, and thus I think it's not a true indicator of my account performance.
I tried to find an MS Excel function to do this; so far, I have not had any luck. What I want to find out is the average return per week or per quarter given these known numbers on my statement:

1. a beginning balance in dollars (B)
2. an ending balance (E)
3. number of weeks contributed in this quarter (N)
4. weekly contribution amount (W)
5. total quarterly investment additions (W x N)

FYI, the contribution is made on a weekly basis for a same amount. It's 100% vested and is invested in one plan. What is the formula to calculate this weekly return? Thanks a lot.

how do I find a great financial advisor?

krautland — Mon, 28 Aug 2006 12:00:59 -0800

my new employer is offering a 401k package via fidelity investments that is, dare I say it, overwhelming to me. I am especially bothered by the fact that the only advise available on said fidelity investment choices is via the nice folks from fidelity investment. so I looked for financial advisors - but how to judge them? how should I know that whoever is passing themselves off as knowledgeable actually is just that? I want to get good advise but I don't know where to look. any ideas what I should do?

oh yeah, if it matters: I am in my late twenties, single and just moved to chicago. I graduated two and a half years ago and already am well in the top 5% income bracket, so I think I can take a couple risks with my 401k. but again, I am clueless and that bothers me...