Jewish World Review Dec. 5, 2000 / 9 Kislev, 5761
IRA vs. 401(k) investing; "gofer" gripes
DEAR BRUCE: I recently discovered that I have between $12,000 and $14,000 in retirement funds from a previous employer. I can access this in four years at age 55. I have $70,000 in a 401(k) with my current employer. Would it be more profitable to take this retirement fund at 55 and roll it over into my 401(k), or should my wife and I invest it into an IRA? -- R.S., Cincinnati, Ohio
DEAR R.S.: There is no hard-and-fast answer to your question. If your 401(k) is doing well and you are allowed to roll that money in, fine. If not, why not put it into a self-directed IRA and compare its investments with your 401(k)? Given the fact that rolling it into your 401(k) does not increase your tax shelter, I would be just as comfortable putting it into a self-directed IRA.
DEAR BRUCE: I am 26 and have a job that provides housing. The problem is when I retire 30 years from now, I will have to find my own housing. Right now, 6 percent of my salary goes into a retirement account. I will withdraw it when I retire at 53, at about 50 percent of my highest three years' salary. I doubt that I will ever earn more than $35,000. Should I borrow and try to buy my house now or wait until I retire? There may be other options. - Brad, via e-mail
DEAR BRAD: At 26, the strong likelihood is that you won't be doing the same thing for 30 years. You can only live and make plans as you go along. Since you are saving a certain portion of your salary for retirement, you are on the right track. I would for the time being just make your plans from year to year and not worry about 30 years hence other than to contribute to your retirement account.
DEAR BRUCE: I am 32 years old. For the last three years, I have been a "gofer" for my grandfather, who was in his middle 80s. He was a neat guy, and I have had no problems with helping him. He told me that he was going to leave me a lot of money in his will so that I could go back to college and pay off some bills. About nine months ago, he met a woman in her 50s, and they were married. I have to say that he never looked happier. A month and a half ago, he was killed in an accident. I have just been told that his will leaves everything to his new wife and that I get absolutely nothing other than a couple of personal items. Is there something that I can do about this? -- C.T., Cincinnati, Ohio
DEAR C.T.: There is not a thing that I can think of. Unless you can demonstrate that he acted under duress from his new wife, which may be very difficult to do, particularly given the fact that you say he was never happier. Unfortunately, Grandpa blew it, and there is not much that you can do about it. Anytime older people promise younger folks that they will be remembered in their will, the young folks should take that with a large grain of salt, as oftentimes it doesn't come to
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