Hola Reddit!
So I am looking for some advice :D
A little backround:
I have adulted backwards in my mid 20's - I obtained a stable and well paying senior blue collar position, and decided to quit in order to return to college this fall. I have discovered that I can direct rollover my 401k's $17,000 into a Traditional IRA without penalty due to employment separation.
I can also avoid the 10% early withdrawal penalty from the Traditional IRA if it is for education expenses (including room and board). I plan on withdrawing $500 a month for the next 3 school years to help supplement my income so I can focus solely on school and athletic competitions and graduate debt free. I'll be out of retirement but gained an education and the ability to invest more :D
Another nice benefit of the Traditional IRA is that from 2019 --> Graduation; I will be able to withdraw without ANY taxes because my taxable income will be under $12,000 ( I will also be utilizing military education benefits which are not income taxable).
*There are stipulations within my former employer's contract about only being able to rollover into a Traditional, Roth, or Simple IRA. This is why I first landed on Traditional IRA.
Here are the questions:
Where do I open the Traditional IRA ?
Also..What do I invest in once I am in?
The Schwab Rep. I spoke with yesterday told me that I would be able to keep my money in a Traditional IRA without investing in anything - which would be excellent in order to avoid fluctuations due to the short time I plan on holding the account. This would also make it convenient for withdrawals. But when I spoke with a new Schwab Rep today and he informed me I could not do this. He said a Non-Sweep money market would be my best option. Is this true?
Also, the Schwab Rep from yesterday told me there would be no start up or on-going fees/ hidden fees besides the $5 cost for trades. But it seems from the website that investments do have hidden fees - and if I have to sell first in order to withdraw then I will have to pay for that as well.
Can/will the broker/bank stop me from selling shares/withdrawing funds due to market conditions? (I saw fine print at the bottom of the Schwab site stating this when I was about to open an account and got spooked. )
Receiving different advice and "truths" from different people within the same institution made me put the breaks on. I am very weary because I am in unfamiliar territory here thought I am slowly getting a handle on it. I know in the grand scheme of retirement funds this is peanuts - but those peanuts are my lifeline. I feel like I am walking into a car dealership on horseback. But :D I have come this far and will surely figure something out. Hopefully with the help from some of you fine folks!
Will be incredibly grateful for some solid advice!
Any takers? :D
Submitted August 25, 2018 at 01:20AM by SpaceDockJesus https://ift.tt/2PC08ET
