For Darryl S. Tukufu, a college professor and administrator, rolling over the funds from his TIAA-CREF 403(b) retirement annuity reaped enormous dividends. His wife, Myra, a loans officer with U.S. Bank of Oregon who contributed 6% to her 401(k), benefited from the Bank’s matching funds.
“When I left U.S. Bank, my 401(k) was rolled over into an IRA stock certificate,” says Myra. But she admits that she is yet to invest this windfall. Her husband did otherwise. After a stint as president and CEO of the Portland Urban League, he transferred his pension to a Rollover IRA invested in an MFS Emerging Growth Fund valued at $19,600 and a Putnam Voyager Fund valued at $20,300.
In April 1996, Darryl landed a job as president and executive director with the Greater Cleveland Roundtable, and made a lateral move salary-wise-his earnings increased by 10% and the company contributed the same 10% to his 403(b) portfolio. He complemented his package with Putnam New Opportunities (they now have a combined value of $18,988.35).
In September 1994, Myra joined Key Bank as a client sales specialist and remained in the post until February 1997. For the second time in her career, she contributed 6% to the 401(k) benefits plan, earning $6,000 that was put toward her retirement.
By the time they bought their $250,000 home in April 1997, the Tukufus were able to use his investment portfolio to make a deposit of $25,000 while she borrowed $3,000 against her 401(k) for the closing. Then last year, he launched the Tukufu Group, serving as a public speaker, diversity consultant and TV host. The money has not been bad either: he’s grossed over $55,000 in revenue as of July 31.
Darryl and Myra Tukufu
Combined gross income: $120,000
Car leases: $785
Credit cards: $30,000
Business expenses: $11,000
Financial Expert: Darrell C. Claytor, CFP, Branch Manager of the Shaker Heights, Ohio, office of Securities America Inc.
His strategy: Have the Tukufus rolled-over pension and retirement annuity transferred to stock portfolios that earn solid returns. Encourage Myra to invest her retirement stock certificate in an aggressive investment vehicle. Encourage the Tukufus to work toward building savings/checking accounts so that liquid assets are readily available.
- Claytor structured Darryl’s portfolio to be heavily invested in mutual funds so that he can gain sustained benefits with reduced risks. Darryl has also transferred the balance from his account over a 10-year period from the TIAA-CREF fixed account to the Stock Fund so that he can earn better long-term growth.
- While she managed the books for the Tukufu Group, Myra was working part-time to qualify for health insurance and other benefits. She recently returned to work full time to attract better benefits, and to put faster moves on building a bank account.
- Following Claytor’s advice, Darryl recently purchased another $100,000 of 10-year level term-life insurance coverage, although he continues to maintain the $150,000 policy originally provided by the Roundtable.
- To maintain the disability insurance that Darryl had for his family through Mass Mutual when he was with the Roundtable, Claytor