IRAs, 401ks, and other headache-inducing TLAs

I had the clever timing to start my new job just as my employer was switching 401k providers, from Scudder to JP Morgan. The various confusions meant that it's taken more than three months since I started for my 401k to be completely set up and functioning properly. So, last week I finally got around to going through my rollover forms from JP Morgan and contacting my old 401k provider, ING, about transferring funds from my old employer's plan to my new one.

ING, of course, doesn't like the idea of losing my money. The rep I spoke with first pitched the idea of leaving my existing 401k in place. Bzzt. I'd already ruled that idea out; if I need to borrow against my 401k, or even make a hardship withdrawl, that's a lot easier if the money is in my current employer's plan. The investment mix is pretty comparable at both ING and JP Morgan, so there's no edge there for ING.

Undaunted, the rep next pitched the idea of moving some of the money into an IRA at ING. It's "more flexible" than a 401k, he said. Hrm. This idea I had not considered. I've always kept all my retirement money in one 401k (I did a rollover the last time I changed jobs, five years ago) for simplicity. At some point I plan to look into a Roth IRA, but I hadn't seen any reason to check out a traditional one.

How is it more flexible? I asked. Er um, said the rep. He then offered to
"waive the fees, if that's daunting you." Fees? Grr. I don't like buying things by phone anyway, so I told them to just send my rollover forms and be done with it.

I then went skittering off to my usual information source, The Internets. However, there is not much to be found in the way of concrete details on ING's Rollover IRAs page. It looks like the main selling point is that you have a broader mix of investment options.

I'm pretty conservative with my retirement-stash investments (I'm a margarita-mix girl), and I value simplicity over penny-maximizing schemes that'll generate a .005% higher return. Anyone mucked around with rollover IRAs? Any reason I shouldn't stick with my plan to do a straight 401k-to-401k rollover and continue ignoring it all?

Back in business

Whoops, that was not intended to be a cliffhanger and long hiatus. Once again, the culprit was travel. SF & DC were lovely.

The credit reports I pulled were surprisingly accurate. It's a bit daunting to realise just how many credit lines I've had in my not-so-very-long consumer lifetime. Each report showed more than two dozen accounts -- credit cards, retail cards (usually opened for discounts, used once, and subsequently ignored), student loans, and other assorted bits. While I only actively use two credit-card accounts and my student loan lines, I apparently still have another fistful of still-living retail accounts.

Of all the dozens of accounts listed, though, all were recognizably mine. Yay no identity theft! The only inaccuracy I could find was the address listing on my Experian report, which was for an address I lived at five years ago. Weirdly, the report had both my subsequent and current addresses listed as "past" ones. Still, I doubt I'll bother correcting that. TransUnion had my correct current address. Both reports also listed as my employer the company I left about six years ago. *Shrug.*

It was interesting to see just how many inquires there were by marketers for my file -- each report contained about five pages of them. Discover apparently pings frequently. (Inquiries initiated by you, when you apply for new credit lines, are listed and treated separately. Too many of those inquires can be a red flag, since it can indicate a hunt for lots of new credit. Inquiries by marketers don't affect you credit score and profile at all.)

The report also showed, in the marketing-inquiries section, pulls by credit card companies for account-review purposes. Providian apparently grabs my report monthly. Amex picks it up only once a year or so. I wonder if that means Providian is more likely to pull the nasty trick I've heard about of yanking up your APR for missing *any* credit-card payment, not just one to them ...

Pulling my credit reports

As part of my house-buying daydreaming, I decided to do the annual credit-report pull -- now free, yay!

I did this last September, soon after it because available in New York, for David. That was tricky, since he has no credit cards in his name and has a very limited credit history in the U.S. None of the three credit-report vendors would give us online access to his reports. Each required a paper request. We filed those, and after a month or so got the reports for him from each place. (Tiny, two-page reports. Mine are like phone books.)

I'd thought I did the same for myself around that time, but I couldn't find the printouts I would have made in my files, so I decided to give it another go on Friday. The website is AnnualCreditReport.com.

First impression: This is elaborate. The site routes you in turn through each of the three reporting agencies. First up for me was TransUnion. In addition to expected stuff like my name, address and social security number, TransUnion wanted details on some of my accounts for identity verification. But credit reports are packed with dead accounts. It first rejected the number for my student loan notes and asked me instead to provide an alternative set of information verification data. Fine; I clicked the button to provide details on my revolving accounts. It came up with a list of a half-dozen accounts: three dead store accounts I probably still have open but no longer use, one long-closed card, and two current ones. I gave details on one current card. That checked out ok, but it asked for the account number for another. That too checked out -- but it wanted a third after that. I didn't have available the numbers for any of the store accounts or for the dead card. So I had to try a third verification method: Confirming old addresses. Fortunately, that one finally worked, and it gave me access.

TransUnion also wanted me to create a user name and password for returning to view the report within the next 30 days. More passwords to try to keep track of, whee. (I use CryptInfo on my Palm. It is invaluable.)

Experian was easier: It wanted me to answer a set of four verification questions, about the county I reside in, the street I used to live on, and two questions about my non-existent mortgage ('none of the above' was an option, and the correct one for me.) For return access, it wants me to keep track of the report number, rather than a password.

At Equifax, I bombed out -- it said records show I got my report from them on 9/2/05. Guess I did pull some in September after all. I'll have to hold off till the fall to pull that one.

So after all that to get the reports, how accurate were they? I'll get to that in my next update ...

Stocking my house-buying info bookshelf

Two of my close friends are in process of buying a house right now, the crazy kids. (An actual *house.* In New York City. Who knew such things existed?) This has gotten me thinking wistfully again about real estate. We're not in a position to buy anything now, and I doubt we will be for at least another year, but since I'm always information obsessive, what's to stop me getting started with some research?

Listening to these two go through the details of the buying process, it hit me how little I understood it all. Inspections? Title checks? Swarms of lawyers? Eeek! So, I asked for book suggestions. Home Buying for Dummies was enthusiastically recommended as a good overview. I'm also interested in the larger economic questions about the housing market -- how do you judge when it's the 'right' time for you to roll the dice on a purchase? The Washington Post's personal-finance columnist, Michelle Singletary, is pretty impressed by June Fletcher's House Poor: Pumped-Up Prices, Rising Rates, and Mortgages on Steroids, and makes a persuasive case for it. So I tossed that into my Amazon shopping basket as well.

I'm about 10 pages into House Poor right now. I'll report back when I've finished the books. Anyone else have recommendations?

'Don't Be Evil' investment strategies

It had to happen, I suppose. For years a handful of organizations have focused on advocating socially conscious investing, encouraging individuals and organizations to weed out of their investment portfolios those companies that perpetrate environmental, cultural and political ills. So what's a red-meat right-winger do to? Fight fire with fire (or money with money), of course, and launch a mutual fund pledged "to defend free enterprise from the Left’s use of capitalism against capitalism." Hence we have the Free Enterprise Action Fund, which Daniel Gross entertainingly smacks around in Slate today. It seems that fighting the Left's crimes against capitalism doesn't yet deliver better returns than the S&P 500.

Sort of in line with my last post: I've never been a fan of the line that a corporation's primary responsibility is to make money for its shareholders. There are things more important than absolute dollar returns, but it's become a business cliché for CEOs to spout off that their legal and fiduciary duty is to do whatever will make the most money for stockholders. Worse, this gets spun as some sort of democratic affirmation, because for public companies, anyone can be a shareholder and lots of everyday people are, thanks to mutual-fund-packed 401ks and pension plans. And, of course, we don't want to see bad things happen to corporate America and tank Grandma's pension, do we? Why, those nasty representatives in Congress considering an excess profits tax would just be snatching money from the millions of Americans with Exxon stock in their retirement plans!

Me to Congress: Please snatch money from my retirement plan. I have no idea what stocks are in the mutual-fund mix in my 401k, but personally, I'm perfectly ok with taking a hit there in return for tighter controls on the petroleum companies that are currently reporting annual profits surpassing the GDPs of most developing nations.

Someday soon I need to quit being lazy and explore options like Working Assets' range of financial products.

Why I'm not trying to maximize my money

Back from the road again -- travel and blogging just don't mix well for me. I see my post about keeping separate accounts with my spouse generated comments while I was gone. One point in particular caught my attention:

My wife and I used to operate the exact same system as you and I have to say the best financial decision I ever made was to change this round. ... Our savings rate has tripled since we started doing this and yet we haven't felt deprived. We have just stopped wasting money.

That makes sense to me. It also touches on one of the fundamental issues that got me started on thinking and blogging about personal finance: What do you prioritize over "more money"?

For me, it's a pretty long list. Heading it is "a lifestyle that means I can think about money as infrequently as possible." David and I would spend less if we had joint accounts and cleared purchases with each other. I'm absolutely certain of that. We would also spend more time wrangling with each other about finances. I'm willing to trade away a few hundred dollars a month in additional savings to spare us that stress. I'm also aware that the choice is a luxury I'm very fortunate to have.

Money, in the absolute sense, doesn't interest me. This is why I don't have any desire at all to be an "active" investor -- stocks, interest rates, esoteric investment vehicles and other moneymaking schemes don't seem like any fun to me. Paychecks from our day job are enough for me and David to live on and meet our (admittedly too minimal) savings goals; if I'm going to invest my free time in something, it had better entertain me, and monitoring investments would not.

I will be the token "I hate money" personal finance blogger :)