My account has been flat for two years I've been with this advisor and I'm pulling out. Probably going to see what the market does in the next month or so and jump into some index funds with Vanguard. I have about $40k in this particular account.

What are my tax implications of pulling out, holding onto this money for a couple of months in a savings account, and then transferring it to Vanguard?

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Posted by Breadcrumbs

Baton Rouge

Member since May 2005

2982 posts

Posted on 11/22/16 at 11:00 pm to meeple

I don't think there's a consequence if you do a rollover instead of a distribution. If you transfer it directly from one institution to another it is called a trustee to trustee transfer. Check with your tax advisor, but I think the rollover avoids any tax consequence.

Who knows what the risk is being out of the market for 1-2 months.

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Posted by meeple

Carcassonne

Member since May 2011

9313 posts

Posted on 11/22/16 at 11:41 pm to Breadcrumbs

quote:
Who knows what the risk is being out of the market for 1-2 months.

Can't be any worse than it's been. It's been flatlined for two to three years. NO growth. Some loss, actually. It's pathetic.

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Posted by Shepherd88

Member since Dec 2013

4573 posts

Posted on 11/23/16 at 5:03 am to meeple

You open a Roth at vanguard and submit the transfer. Don't pull the money out.

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Posted by SLafourche07

Member since Feb 2008

9928 posts

Posted on 11/23/16 at 6:14 am to meeple

You can let the money sit in cash at Vanguard. That way you have no tax or penalties.

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Posted by meeple

Carcassonne

Member since May 2011

9313 posts

Posted on 11/23/16 at 7:56 am to meeple

Thanks for the replies. Why the downvote? What's wrong with wanting growth,

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Posted by b-rab2

N. Louisiana

Member since Dec 2005

12575 posts

Posted on 11/23/16 at 8:38 am to meeple

I do have a question for you. Did your advisor ask you when you set up the account what type of investing you want, whether it's aggressive or very passive? growth or stable? Just curious? Have you called him and discussed why you haven't seen any gains? I'm no big fish with mine and I can call him any day of the week and discuss... Maybe you should shop around for a new guy, one that cares a little more.

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Posted by slinger1317

Northshore

Member since Sep 2005

5788 posts

Posted on 11/23/16 at 8:51 am to meeple

I was in a similar situation earlier this year. Had been with a NYLife advisor for about 8 years, and just not happy with the attention he was giving me. I know I'm probably a small fish in his pond, but he met with me once a year and you could tell all he did was print out a performance summary the night before. Growth was minimal, and all he told me was to be patient. I am mid 30's with about 60K in my Roth, so we definitely had it geared toward growth.

This past April I had some tax implications with income and my (ex) spouse being covered by a retirement plan at her job. He was supposed to look into a workaround but never got back to me by April 15. I needed to get my contribution in, so I met with a Scottrade rep in town and transferred my entire account to them. Had to go into a Traditional, then a conversion. Based on my account size I got free trades for a year and $200. I bought most of the same funds he had me in, but also diversified about 25% into a little more risk.

I know its more on me now, but I have a good mix, and always use an index fund. Over those 8 years I averaged about 4% growth, I am at 6% since April. I am happy I made the switch.

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