Anyone know about stocks in 401k

[stoney508]

My company provides company stock into my 401(k) as part of its company match. There is a company that has started to buy out our company and has offered a set amount to buy all outstanding shares of there stock by a set date coming up fast.

I am wondering if anyone knows if I can sell that stock and distribute it how I see fit in my 401(k)? I am going to call my benefits center coming up shortly but wanted to see if anyone knew on here?

[Tabs]

I don't have any answers for you, but I would love to hear updates on this.

Also, is this company experiencing a hostile takeover?

You wouldn't mind sharing your company's ticker, would you?

[Retired To Win]

It depends on how the 401k is set up. Generally these savings plans do not allow for the purchase and sale of stocks.

I should think it would be different for company stock that has been contributed as a match into the 401k. In which case it ought to work just like the sale of any other asset in the 401k. You sell it and the money from the sale remains in the 401k.

But, since there is a deadline for the sale in your case, do contact your 401k administrator and get the sale set up through that person.

Good luck.

[stoney508]

Well the deadline is come and gone I did contact my 401(k) provider and they were not able to help very much.

I wouldn't call whats happening a hostile take-over just one company aquiring another and the stock needed to be sold because it was becoming one company. But to a sense it is a hostile take-over.

Now what actually happened is they cashed out my company stock in the 401(k) and the money from that went into an ESOP account which them was distributed into my lifepath fund which is currently where I had my allocation going into. (I need to change my allocations soon and am going to my finacial advisor for help soon) What really threw me for a loop is I was 40% vested in my 401(k) which was around 15,000 (10,000 vested in) and with the sale of the stock and the switch from one company to the other my 401(k) amount jumped dramatically to 40,000 and now 100% vested 2 years earlier than I thought which put me into a very good stand point for my retirement goals.

Now the kicker is that I am currently 27 years old and when the waiting period for our companies 401(k)'s to be consolidated into 1 is over I will have the option to distribute this into my own IRA, distribute it into the new companies 401(k), or cash it out (would never think about doing).

My thoughts are mixed if I want to distribute this to my own IRA and then back door convert this into my ROTH, I know I would pay a lot in taxes but being as young as I am would this be better for me? I currently have about 2,800 in my ROTH at this point contributing only 100 a month into it.

Your thoughts anyone?

[jIM_Ohio]

My company provides company stock into my 401(k) as part of its company match. There is a company that has started to buy out our company and has offered a set amount to buy all outstanding shares of there stock by a set date coming up fast.

I am wondering if anyone knows if I can sell that stock and distribute it how I see fit in my 401(k)? I am going to call my benefits center coming up shortly but wanted to see if anyone knew on here?

If you are being bought, the 401k is likely to change

stock in 401k will be sold, and the surplus cash would be redistributed amongst existing funds

[stoney508]

In all of your opinions should I roll my 401(k) into my own IRA and possibly convert it into my ROTH paying the taxes on it? I am 27 and I will continue with a 401(k) with work just wanted to know if it would be beneficial for me to do that or not?

[jIM_Ohio]

In all of your opinions should I roll my 401(k) into my own IRA and possibly convert it into my ROTH paying the taxes on it? I am 27 and I will continue with a 401(k) with work just wanted to know if it would be beneficial for me to do that or not?

I would DEF roll the 401k into an IRA
more control is the reason
less fees is the second reason

Converting to a Roth has a lot more to that decision matrix
Income, taxes, filing status (are you single or married)?

[stoney508]

just recently got married she works part time right now and im full time I have my roth valued at about 2800 another in american funds for about 1400 about 3400 in our joint savings. she takes home about 13000 a year I take home just under 50k with lots of over time. We both owe about 19k for student loans a piece. If there is any more information needed let me ill try to get that to you. I am 27 and she is 23 she is just basically starting out since she graduated about a year ago and has a degree thats not ideal.

[jIM_Ohio]

just recently got married she works part time right now and im full time I have my roth valued at about 2800 another in american funds for about 1400 about 3400 in our joint savings. she takes home about 13000 a year I take home just under 50k with lots of over time. We both owe about 19k for student loans a piece. If there is any more information needed let me ill try to get that to you. I am 27 and she is 23 she is just basically starting out since she graduated about a year ago and has a degree thats not ideal.

Here are a few financial issues to consider

1) The best asset everyone has is their earning power. I would have a serious conversation with your wife about kids, work, and how she sees her life unfolding the next 30 years. Issues I would make sure get discussed
a) go back to school to improve degree/ earning power before she has kids
b) have kids, then go back to school
c) starting a career which does not need a degree where she can work from home while taking care of kids
d) does she want to be a stay at home mom
e) does she feel the need to have a career?

2) You are in the 15% tax bracket (max taxable income of $74,900). Here is what I would do. Look up the tax return you filed in 2014. Find line 43, 38 and 22. If you used 1040a or 1040 EZ the line numbers will be different (redo your tax return on long form to validate this information).
line 43 is taxable income
line 38 is adjusted gross income
line 22 is total income

Line 22 is the biggest, line 43 should be smallest.

3) Add up total value of all tax deferred IRAs and 401ks.
3a) convert as much to a Roth, as long as the value listed for #3 when added to line 43 (taxable income) does not exceed $74,900 (you don't want to pay more than 15% when you convert).
3b) if you converted all your IRAs in one year GREAT
3c) if you only coverted a portion, realize you can do this every year until its all coverted. ONLY CONVERT IN 15% tax bracket for maximum savings.

4) Focus on good financial habits
a) spend less than you earn
b) save your overtime, don't spend it
c) research all financial decisions and get used to doing homework (like #2 and #3 above).

[YolandoAmaya]

A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts. Employee 401k contribution are automatically deducted from their paycheck each pay period. This money is taken out before the employees paycheck is taxed. The contributions are invested at the employees direction into one or more funds provided in the plan. Employers often "match" employee contributions, but are not required to do so. While the investments grow in the employees 401k account, they do not pay any taxes on it.