Owner, Financial Planner
Brent Sutherland is a CFP® practitioner and has worked in financial services for over 12 years. During this time, he's gained experience in the worlds of corporate accounting, high net worth investment management, and personal financial planning. He has witnessed, firsthand, how the financial services industry has fashioned itself into an overly complex machine in an effort to cause confusion, encourage mistakes, and justify fees; all to further enhance its own bottom line. Brent believes there is a strong correlation between financial noise and financial mistakes which further delay one's personal financial success.
Therefore, Brent's objective is to help individuals turn off the noise and challenge the traditional approach to financial planning and thinking. In his experience as a financial advisor and personal finance enthusiast (+ early retirement advocate + semi-minimalist + real estate investor), he has found that most often the simplest solutions and some outside the box thinking will better help individuals on their way towards sitting firmly in the driver's seat of their own personal economy.
Personally, Brent was born and raised in the Blue Ridge Mountains of Southwestern Virginia, but now call the city of Pittsburgh home. He has a wonderful wife and a mischievous dog; and like to spend his free time traveling to new places, visiting with family and friends, driving himself a bit insane over Virginia Tech sports, reading Game of Thrones spoilers, and (of course) geeking out over the latest personal finance products and ideas.
BS, Economics, Virginia Tech
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Yes, you do want to make estimated tax payments to account for increased liability due to the conversion, otherwise you'll be hit with a large tax bill at the end of the year. In order to avoid having a penalty also added on top of this increased tax liability (which generally applies if you fail to pay at least 90% of the current year's tax), you'll want to make sure you pay at least 100% of the last year's tax liability (or 110% of last year's if your adjusted gross income is $150k or more for a married couple or $75k for a single filer).
I hope this helps! Good luck to you.
Yes, a 401(k) account owner has the right to move their money wherever they choose. In order to avoid penalties and taxes, these funds would need to be moved/transferred to either the new 403(b) or into a traditional/rollover IRA. A couple of benefits gained for moving to the 403(b) could consolidation of funds/accounts (simplification) while also possibly generating more creditor protection for the investor. Alternatively, some potential benefits of the traditional/rollover IRA could be lower investment costs and improved fund selections.
Best of luck! I hope this brief bit of information is helpful.
First off, congratulations on your retirement!
While there are some unknown moving parts here, I can speak to the pros and cons of rolling over a 403(b) to an IRA in general terms.
Yes, you will likely have more control (of your money) and options (surrounding your investments) by moving these funds to an IRA. This will largestly depending on the custodian/provider of the IRA. If you go with a notoriously low-cost provider (think Vanguard or Fidelity), you will also have access to funds that could have much lower management fees. All of this combined can be a boon to the long term growth prospects for your portfolio.
Keep in mind that by moving these funds to an IRA, the advisor you are working with also has more control of your funds and could potentially place you into expensive products. Annuities have many benefits but they usually do come with higher fees (and commissions for the advisor). Make sure you understand (thoroughly) how the annuity operates and if it is indeed proper for your situation.
Best of luck! I hope you enjoy this newfound time away from the workforce.
This is a difficult question to answer without knowing more detail about your financial situation. But that being said, the general rule of thumb when deciding whether or not to pay off debt is to compare the interest rate of your debt to the return you might expect to otherwise earn with that money.
For example, in a scenario where debt is carrying an interest rate of 5% but other investments are expected to generate a 10% return with reasonable confidence, it makes sense to allocate excess captial to the investments instead of the debt. By doing so, the long-term impact on one's net worth should be enhanced. The opposite of this scenario would also hold true (when interest rates on debt are higher than the expected return on investments, it then makes more sense to allocate capital to the debt).
Of course, this rule of thumb doesn't take into actual human behavior. If you are the type of person who is prone to misbehaving with debt, sometimes it's simply better to rid yourself of debt completely (and stay away). Be honest with yourself. Will you be more encouraged and motivated to make healthy monetary moves going forward if 1) that debt is out of the way, or 2) you are able to grow that money in an investment that excites you?
All the best to you! I hope this helps provide some perspective around your options.
While everyone's situation poses their own unique complications, tax preparation software has become very intuitive over the years. Even the more complex scenarios can be handled through most leading applications. If what you've mentioned is the extent of your tax complications (and you are comfortable with a computer), I would think you would be perfectly fine utilizing an online tax filing program. Programs such as TurboTax will guide you through every detail of your return, answering any question you may have as you go. I believe you'll likely be pleasantly surprised with the experience.
Best of luck!