March 28, 2005
it's greek to me
I still have my 401-k money and all the stock and stock options I piled up when I worked for Kerr-McGee. I received TWO letters in the mail today giving me a bunch of financial jibberish that I don't understand. I think they want to roll my 401-k into an IRA, which is fine with me, but I'm not CERTAIN that's what they mean. I damn sure don't want to cash it out before I'm 59 and 1/2 years old because the government will eat me alive.
I'm an English major. I don't do math.
As far as the stocks go, my options are good for 10 years from the time I got them and the incentive stock I received for outstanding performance isn't ripe to sell for another year, if I read the fine print correctly. But I don't know if I'm reading the fine print correctly. It's all Greek to me.
I'm going to have to get on the phone and receive some clarification from these people. That's a sizeable sum of money we're talking about, and I don't want to fuck it up through sheer ignorance. And I am ignorant when it comes to complicated money transactions.
If I had my college days to live over again, I would take a few courses in finance and accounting. Knowing a little bit about that aspect of life would do me a lot more good now than being able to quote Shakespere's sonnets.
I feel like an unarmed man in a gunfight.
You definitely want to roll over your 401(k) into a self directed IRA. If you roll it over, there should be no tax implications to you, as you're rolling form one qualified plan to another.
Once rolled over, you can sell the stock, roll the funds into mutual funds (Try Vanguard, they have the lowest expenses), and then you're in control of your money and you won't have your eggs in one basket (of Kerr-McGee stock).
Try The Motley Fool (ww.fool.com) for advise on how to do this.
As always, consult your tax advisor (sinc I'm sure as hell not one).
Good Idea Rob, get some help on this, your 401K is probably growing faster than a basic IRA, you need to take the time to evaluate your options before rolling over, legally I don't think KM can force you out of the 401K either.
First of all, go ahead and talk with a CFP (Certified Financial Planner) to lay out your long-term plan. I think JOEB got it right. They probably want to get your 401k money out of their accounts since you're no longer an employee. Your best vehicle for the rollover is probably the IRA, depending on your goals. You'll have to decide when the right time to exercise the options will be. I'd go with mutual funds on that. There are several that are good. Look for one with a relatively long track record of good returns. But, discuss it with a pro before you make any decisions. Whatever you do, don't cash out the 401k, period. You can roll it with no penalty, but do it right.
On reading your post, I figured "Betcha somebody somewhere advised a lawyer. I'll just betcha."
Amazingly enough, nobody did. Therein lies hope.
Are you sure you should have posted about a large amount of money,with your ex liable to read it? Between her greed and a lawyer's basic sliminess,you might be setting up to get reemed again.
Read PJ O'Rouke's book. Like you, he didn't take financial courses in college. Then, he went back. All the financial crap has been written by communists. What did you expect?
Everything with your 401-K is designed to rip you off. If, on the other hand, you lived in the Cayman's, who knows?
I don't mean to jest ya. I'm sure you're gonna find it hard to make a decent choice. When money like this comes out of companies like Kerr-McGee all the slime in the world emerges from the sewers to pardee.
But you do need a great attorney. Out here, in Glendale, CA, I go to Robert Hall. Geniuses. But you'll never get a great guy on the phone, now. Not before 4/15. Can ya wait? I'd bet they have an 800-number. And, if it's financial, they are the world's best at protecting people.
Did you also put "more" money into your 401(k) ? Often called "after-tax" contributions. Would be more percentage-wise than your pre-tax 401(k) "max" and the K-G matching percentage, both of which are taxable on "distribution". There are rules on receiving money from 401(k)'s, often requiring it be taken from all three "pots". But, you only need to pay tax on the "pre-tax" two, not your "after-tax" contributions. But, if you rollover ALL of whatever you have now into a IRA of your own, no tax penalty until you take some out.
If you need some cash now, you can keep the "after-tax" cash, and rollover the pre-tax pots into a IRA set up for you, with no tax penalty until you "distribute" from your new IRA.
This is how I took a partial 401(k) distribution to pay cash for my new Vette without a tax penalty this year. But, sooner or later the Gov gets their share, since at age 70 1/2 you have to start taking some out of the pre-tax pots each year. Or just die before then, and it passes to your heirs.
Clear ? "Perfectly !" Is it clear ? "Crystal, sir".