Welcome to Knoxville. Your question is one that I am sure many people have concerns with. There are several local banks that I feel are very strong. But, I also felt the same way about Citigroup, Merrill Lynch, Lehman Brothers and so on. So to answer what bank will not go away is almost impossible. You might check the FDIC website for some information, but my suggestion is to make sure none of your deposits are over the FDIC limits. That way if a bank goes away at least your money won't.   « less

This is a question I hear a lot. Of course to answer this question properly I would need to know the interest rate on your mortgage, other savings, your age and your goals. But, I really think the answer to this question lies in your ability to save, and your adversion to debt. If you are one of those people who just cannot stand to owe anybody for anything, then paying down your mortgage will probably make you feel better. But, if you are not adverse to debt and you are not a good saver, then investing the money may be a better idea. Typicaly a person will always make that monthly house payment, but when it comes to saving an extra several hundred a month it is difficult. The answer to this question seems to always come down to the individual make up of the person. Don't look at this question as to what makes the most fiscal sense. Look at it as to what makes you the most comfortable.    « less

Unfortunately you have owned an investment that makes money when the market goes down, and we have had a suprisingly strong market since June. While the S&P Index is only up 13% since your investment, this fund doubles the performance...good and bad. Hopefully you were aware of this. I do expect a market pullback in the next 30 or 60 days, but that is not guaranteed. If this type of investing makes you nervous I suggest you look at taking a different approach. There are other ways to invest in the stock market without taking as much risk. I believe in the markets. I also believe that the emotions fear and greed prevent people from making money on a consistant basis in the markets. Advisors are constantly helping clients calm those emotions. Sit down with your advisor and really talk through your investment, your goals, and exit strategies.   « less

This is a question many people should be asking. Many people do not understand how to invest their 401k's, and unfortunately employers and plan advisors don't really advise. This is a service that we provide. All we need is a copy of your investment choices and a little background information and we will be glad to suggest an allocation for you. Contact us at your convenience.   « less

One of the rules for contributing to a ROTH, or a traditional IRA, is that you have earned reportable income. It does not sound like your scholarship qualifies for this so there are no qualfied plans for you to contribute to. However, you can invest in an annuity, which the earnings are tax deferred. Since your contributions are not tax dedcutible, there are no limits as to how much you can invest. All of the earnings are tax deferred like in a traditional IRA. You also have to abide by many of the same rules as in a traditional IRA such as not taking the money out until the age of 59 1/2. If you do take money out prior to age 59 1/2 you will pay taxes on the earnings and a 10% penalty. There may be other advantages or disadvantages involved. Please talk to your local financial advisor for further information.   « less

Most people prefer to roll their 401k into an Individual Retirement Account (IRA) once they leave their employer. It is a simple process and the plan administrator at Merrill Lynch will provide you with the forms. By rolling the money into an IRA you will have more investment choices, and a little more control. Unless Merrill Lynch asks you to move the money out of the 401k you do not have to. Your money will continue to be invested the way you set it up, and you can make changes to it as if you still work there only you cannot add more money to it.    « less

The parameters you put on your in-law's money certainly does describe what "varaible" annuities have the availability to do. Not many other investments can do all that you require and also give some protection on the money. "Variable" annuities are more expensive than just buying mutual funds or individual stocks, which is where most people put some of their money when they want to outpace inflation. On average they cost about 2% to 3% more on an annual basis (commissions included) than a typical stock mutual fund. But, for that extra cost there are benefits. Those benefits could be a guaranteed death benefit for the heirs, which protects the principal in down markets. Also, there could be a living benefit, which would guarantee the return of principal in the event the market does not perform, and finally there could be a guaranteed income benefit that would provide income for life if it was needed. You will have to do your research to see which company would provide the most benefit or benefits for their needs. If the additional cost does not justify the benefit for them, then they will have to look at using mutual funds, stocks, and bonds. Here is the thing. If you know stock and bond prices will always go up, or you have the time (at least 10 years) to wait for price recovery, then you do not need any of the above guarantees. But, if you are not willing to take the risk of investing, then buying a little insurance to guatantee the return of your principal, guaranteeing an income, or a lump sum of money being available might be a god idea. If we can be of further service feel free to call our office anytime.   « less

This is a very common question, and there are several reasons to convert a 401k or 403B to an Individual Retirement Account (IRA). The following are some of the reasons for doing this: 1. More investment options. For example, if you want to buy a Certificate of Deposit it is allowable in an IRA, but not typically in other qualified plans. 2. Tax efficient transfer of money. If your son is to be the sole beneficiary, then it would be nice for him to have the option of how to take money from your retirement accounts. IRA's offer him the flexibility of taking payments over his lifetime to "stretch" out the tax deferral. Qualified plans typically do not. 3. Insurance. Inside of an IRA you have the ability to insure some, or all of your money against loss. 4. Simplification. You can roll your 401k, or 403b, into any existing IRA's therefore only having to manage one account. 5. Management. Company sopnsored plans typically do not offer an advisor to help you manage your money. If you want or need help in money management, it is much easier to accomplish within an IRA. If you have any further questions, please contact J. Larry Cox at Investment & Retirement Services.   « less

This is a difficult question to answer without knowing exactly how the money is invested. But, it sounds to me like you are more frustrated with the performance of your investments than your the need for cash. If that is the case, then I would suggest that you avoid any penalties and concentrate instead on a new investment strategy. Many people who have subscribed to the philosophy of buying good quality companies and holding on to them (the ol' Buy, Hold, and Hope approach) are in the same boat with you. They just want the heck out of the market and keep what they have left. While I understand the feeling, it does nothing to help them achieve their initial goal. There are probably ways that you can change your investment strategy without incurring fees and penalties. Try looking at your current investment vehicles and see what your investment choices are inside of these. Then meet wtih your advisor, and see what kind of strategy he/she can develop for you. You may be suprised at the things that are available.    « less

This question seems simple enough, but is indeed a litle more complicated so I am going to refer you to a CPA or Tax Attorney to get your final answer. I will tell you that the last information I had said that you are eligible for the favorable tax treatment of NUA if you receive a "lump sum distribution" of your 401k. In general, a lump sum distribution is defined as a distribution within one taxable year of the balance credited to the employee which becomes payable as a result of the following triggering events: 1. on account on the employees death 2. after the employee attains age 59 1/2 3. on account of the employee's separation from service, or 4. after the employee has become disabled In many cases, the employee's retirement will be the triggering event. Again, consult your CPA or Tax Attorney for the definitive answer.   « less