Just a suggestion when a lot of us get the axe. I plan on taking my 401k elsewhere. They will not keep a dime of my money to ‘manage’. They couldn’t manage a lemonade stand well. As long as you roll it into another retirement type fund at Fidelity, Dreyfus, etc, and don’t take it directly, there is no penalty. Do it let them control any more of our lives than they already screwed up. Check with an independent financial consultant of course.
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People who leave the three 401k funds are leaving money on the table. Good luck. I know people who have been drawing on their SF 401K's for years and have more money than when they retired. The biggest problem with SF 401Ks have is the RMD withdrawals required by the government when they turn 70 which is a good problem to have.
the target date funds there are managed by Vanguard, not State Farm. that is why I have my 401k money only in several of the target date funds. State Farm is not an investment company and I want my money managed by one of the best.
I left SF after 25+ years and rolled my 401K over to another company. The big thing to look at in addition to fees is the returns that the funds have had over time, typically 1, 5 & 10 years. In my case, I already had a Roth IRA set up with another company that I had experience with for over 20 years. There are fees of < 1% but the returns have been much better than at SF. For those of you too new to have received them, SF used to send out print-outs once a year with projections that we would be millionaires when we retired, the reality is not so much. I would recommend rolling the money over somewhere else. anywhere else!
Think before rolling a 401k to an IRA. If you separate from service during the year you turn 55, then you can withdraw from a 401k without penalty. You cannot withdraw from a traditional IRA without penalty until age 59.5. Of course, taxes are due on traditional 401ks and IRAs when the funds are withdrawn.
SF does not assess management fees to their three 401k funds. Fees are assessed in the age-based management funds.
@RTNNsfC-1ldd your advisor is either incompetent or a liar. Read your prospectus, then hire someone else.
Run, don’t walk from your financial advisor if he is telling you there are hidden fees in the 401 K.
My financial advisor says SF charges a lot of ‘hidden’ fees in their 401k. He does a much better job of handling my other investments, so I will be moving mine as soon as soon as I can without penalties. Might find a better credit union, too! I just don’t want all my eggs in the SF basket. Pension is enough for me to have connected with this failing bohemeth.
Great advice above. Consider everything before moving your money. I don't want a dime going to sf after my qtd either. But I also want as many of my own dimes as I am entitled to.
A good discussion, this needs to be discussed...
“”The 3 'old' SF funds are 0.00%””” would not this imply that SF manages?
A few years ago a couple of my buddies who used to work at State Farm got buy-out offers on their pension. The amount offered was laughable... so the response was laughter.
The 3 'old' SF funds are 0.00% fees, the target dates .06% (60 cents per thousand dollars per year). No load/sales fees
Verified from Annual Fee disclosure
@RTNNsfC-pwx you need to read your prospectus before spreading BS. The Farm does a lot of things wrong but how they manage the 401k is not one of them. The fees are nominal, well below 1% you claim and they do in fact subsidize all of the buy and sell transactions on a day to day basis.
The Farm does take a cut from funds - all employers do... For that exact reason there is only a very limited numbers of funds you can buy and you cannot buy individual stocks (they pay The Farm for the priviledge of being offered, they charge us the employees annual fees that often exceed over one percent of what you have invested - multiply that pct with 35 years of work, add compounding and they will robb about half of all that you save)
They're not making money managing the 401k, it actually costs them. It's not like there's SF stock that they're buying with your savings.
The 3 SF managed funds have no fees, but I wouldn't call them well diversified as they're mostly blue chip US stocks/bonds
The target date funds are managed by Vanguard, and if you want that type of investment, it's a good option. They're good in that you don't need to readjust as you get closer to retirement. We pay 'institutional' management rates which is like < .1%..you're not going to beat that taking it elsewhere. Plus advisors are going to take a big cut on top of that
The options are pretty limited, so if you want to invest in other funds for diversification or performance reasons, then go for it.
Where they will 'get you' is if they offer to buy out your pension. They're wanting to transfer the risk to you. If the market crashes, they are on the hook for the monthly payment.. If you cashed out, you're out of luck. There are other factors to consider such as life expectancy and how much you've accrued and if you think it's worth the risk.
A talk with a financial advisor is always advisable.
Thanks for the info! And I agree. And once all these employees hit QTDs and take policies with them too, it’s going to be interesting.
*don’t let them control......