The 401(k) Series #7: Weighing Your Rollover Options

By | October 19th, 2017|General|


When you retire or change jobs, you have new options for your old 401(k) that can provide continued potential tax-deferred growth opportunities. With a transition of this magnitude, it’s helpful to understand the steps in the process and have a checklist for guidance.


  • Contact your former HR department and understand your options
  • Consider the pros and cons of those options (See Below)
  • Consult a Financial Advisor and develop a retirement income strategy

Now let’s discuss your options. There are 3 main options you will be given the opportunity to evaluate:

1. STAY IN YOUR PLAN – If this is an applicable option, you…
  • can maintain the tax-deferred status, earn tax-free growth and avoid paying current taxes or penalties
  • will be limited to the investment choices in the plan
  • will be restricted to the withdrawal rules of the plan
 2. ROLL YOUR SAVINGS INTO A ROLLOVER IRA – This is the recommended option because you will…
  • maintain the tax-deferred status, earn tax-free growth AND avoid paying current taxes or penalties
  • be able to consolidate your retirement savings
  • add additional investment options
  • enjoy more flexible withdrawal options
  • potentially lower fees than traditional 401(k) plans
Investment costs and fees, outside accounts, and overall financial plan should be taken into consideration when evaluating an IRA rollover.

3. CASH OUT (NOT RECOMMENDED) – If you cash out your 401(k)…
  • there are immediate & significant tax consequences
  • there are most likely withdrawal penalties
  • you will have immediate access to the funds
  • you will have 60 days to complete a rollover

If you choose the recommended option of rolling over your old 401(k), use this step by step guide to help you through the process.


  1. Open a Rollover IRA with a trusted Firm
  2. Complete your Distribution Paperwork to do a DIRECT rollover to your new IRA
  3. Consult a Financial Advisor to develop a strategic retirement plan based on your personal financial situation
  4. Implement your new strategy and focus on disciplined investing

Quarterly Market Review – Q3 – 2017

By | October 11th, 2017|General|


Click on the link below for a detailed analysis of quarterly performance of the global equity and fixed income markets.


The Uncommon Average

By | October 9th, 2017|General|

“I have found that the importance of having an investment philosophy—one that is robust and that you can stick with— cannot be overstated.”

—David Booth

The US stock market has delivered an average annual return of around 10% since 1926.[1] But short-term results may vary, and in any given period stock returns can be positive, negative, or flat. When setting expectations, it’s helpful to see the range of outcomes experienced by investors historically. For example, how often have the stock market’s annual returns actually aligned with its long-term average?

Exhibit 1 shows calendar year returns for the S&P 500 Index since 1926. The shaded band marks the historical average of 10%, plus or minus 2 percentage points. The S&P 500 had a return within this range in only six of the past 91 calendar years. In most years the index’s return was outside of the range, often above or below by a wide margin, with no obvious pattern. For investors, this data highlights the importance of looking beyond average returns and being aware of the range of potential outcomes.

S&P 500 Index Annual Returns


UA 1

[1]. As measured by the S&P 500 Index from 1926–2016.

In US dollars. The S&P data are provided by Standard & Poor’s Index Services Group. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index returns do not reflect the cost associated with an actual investment.


Despite the year-to-year uncertainty, investors can potentially increase their chances of having a positive outcome by maintaining a long-term focus. Exhibit 2 documents the historical frequency of positive returns over rolling periods of one, five, 10, and 15 years in the US market. The data shows that, while positive performance is never assured, investors’ odds improve over longer time horizons.

Frequency of Positive Returns in the S&P 500 Index

Overlapping Periods: 1926–2016

ua 2

From January 1926–December 2016 there are 913 overlapping 15-year periods, 973 overlapping 10-year periods, 1,033 overlapping 5-year periods, and 1,081 overlapping 1-year periods. The first period starts in January 1926, the second period starts in February 1926, the third in March 1926, and so on. In US dollars. The S&P data are provided by Standard & Poor’s Index Services Group. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not an indication of future results.


While some investors might find it easy to stay the course in years with above average returns, periods of disappointing results may test an investor’s faith in equity markets. Being aware of the range of potential outcomes can help investors remain disciplined, which in the long term can increase the odds of a successful investment experience. What can help investors endure the ups and downs? While there is no silver bullet, having an understanding of how markets work and trusting market prices are good starting points. An asset allocation that aligns with personal risk tolerances and investment goals is also valuable. Financial advisors can play a critical role in helping investors sort through these and other issues as well as keeping them focused on their long‑term goals.

Load More Posts