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Champion Author
San Jose

Joined:Jul 2014
Message Posted: Apr 18, 2016 11:16:28 AM

Do you have 401K? If not why not.
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Champion Author Houston

Joined:Nov 2005
Message Posted: Apr 18, 2016 3:45:56 PM

No, I don't.

I used to have a 401(k) before I left Boeing in September 2009. But the withdrawal options that they had weren't adequate to meet my distribution requirements. So, I did a trustee to trustee transfer to a rollover IRA where I had the flexibility to adjust how much I took out each year. Before I turned 59 1/2, I used the life expectancy method to do distributions without the 10% penalty tax for early withdrawal.

In 2Q 2012, I decided that running what was essentially my own mutual fund was cost effective but a major consumer of time. I was swamped in information. In June 2012, I had a professional asset manager do an analysis on my holdings. It was $2000 for the analysis but they waive the charge if you give them your account. I gave them my account. They spent most of July 2012 selling what they didn't recommend and buying what they did recommend. I had a number of stocks that they recommended and they bought more.

The way the account is set up, I can look at any time but I can't trade. However, if there's something that I absolutely want to have or not to have, I can have them make changes. I started out with 100 shares of Boeing and I said to keep them. They later on bought another 50 shares. But later on, I opened a taxable account at another brokerage (don't have to have as much money as with the other folks but then the taxable account is self directed) so I'd get the glossy annual reports in the mail. After I did that, I told my professional asset manager they could sell the Boeing stock. They switched into something else a few weeks later.

I now have a separately managed account (no companies that make most of their income from alcohol, casinos, gaming, or tobacco). When I started out, I paid a 1.25% annual fee of assets under management.

In November 2014, I decided to buy a house. I bought it for cash because I had enough money. Afterwards, my account value dropped below a threshold and they started charging a 1.50% annual fee of assets under management. If my account value goes up above the threshold my annual fee will revert to 1.25% of assets under management. The higher the account value goes, the lower the percentage they take.

The asset manager goes out about twice a year and does a wine and dine for the clients. Sometimes, it's a formal presentation. Sometimes, it's an informal question and answer session. Sometimes, they just have the clients get together and talk about whatever. We had a Q&A in January and they've scheduled a formal presentation next month.
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