Monday, April 7, 1997
Ten Little Race Cars
Clarified
by
[email protected]
I wanted to add some caveats to my recent fribble about trustee-to-trustee transfers. I mentioned that this was a great way to get control of your own money. I thought that since I was lucky enough to be able to transfer money out of my 401(k) to a personal IRA account, that this was a feature for all 401(k) plans. I was not the only one who believed this, since my discount brokerage's representative agreed with my understanding on transfers.
Foolishly, however, I dug deeper and asked more questions. The retirement specialist I talked to at another discount brokerage said that this was true only if your plan allowed transfers. It is not true of all plans. In fact, I learned that some companies prevent you from being Foolish by forcing you to invest your 401(k) money in their stock. Needless to say, these plans usually won't transfer your money to a place where you would have a choice.
So, talk to your plan administrator before submitting a transfer form. If you can't transfer money out, lobby your personnel office to change your plan so that you can.
Thanks to everyone who sent me comments.
Foolishly,
Mark Brady
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