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Bank of America IRA Review/Rates
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I was very lucky to land a lucrative job when I graduated from college. Unlike many of my former classmates, I left school with no debt obligations … I had even paid off my car loan. With no debt and a sizeable salary, I could easily afford to participate in the retirement plan my employer offered, a 401(k).
Even though I had contributed the maximum permissible amount to my 401(k) account by deferring a portion of my pay, my accountant told me I needed to reduce my taxable income even more to avoid being taxed at one of the highest rates the Internal Revenue Service could levy against a person’s wages. He advised me to open a traditional IRA. He further instructed me to deposit the highest allowable amount into the account before April 15th of the next year.
Just before the deadline, I met with a financial planner who worked for Bank of America. The planner was more than happy to set up a traditional IRA for me, but was shocked when I told him the amount of my initial deposit. He commented on my youth, adding that he was surprised that someone of my age could afford to contribute several thousands of dollars to an individual retirement account. He then continued to lecture me about the advantages that dollar cost averaging offered when compared to investing a lump sum into an interest-bearing account like an IRA. In my effort to silence the man, I agreed to make future contributions to my account on a monthly basis instead of making a single deposit at the end of a tax year and signed paperwork documenting my commitment to do so.
Next, the Bank of America representative discussed allocating the funds in my retirement account. He said that since I was so young and had decades before I’d need to use my money for retirement, I should invest in an aggressive mix of mutual funds, specifically recommending a technology fund and one that invested in overseas projects. Confident in the man’s knowledge and recognizing that I had no idea what he was talking about, I agreed with his suggestions. Half of my money went into the technology fund and the rest went into what I still refer to as the “foreign fund.”
For the next few years, Bank of America automatically withdrew money from my checking account and deposited the funds into my traditional IRA every month. I was thrilled by how easy it was for me to save for my golden years. I was excited by the growth in my account, too. Although I never again met with the financial planner who had set up my IRA initially, he had obviously given me sound advice regarding the allocation of my investments.
By the time I reached the ripe old age of thirty, I had learned a lot about the stock market, government and municipal bonds, and other types of investments. I had also changed jobs twice and moved from the northeast to the southeastern part of the United States. Because I never updated my records with Bank of America, the bank had stopped taking withdrawals out of my checking account to put into my IRA two years earlier. I didn’t care, though. With a family to support on a severely reduced salary, I wasn’t sure I could afford to contribute to my IRA anyway.
I did care when the economy crashed and I received a summary of my account’s performance at the end of the year, however. I cared a lot when the value of my account had dropped to less than half of what it had once been. I cared even more when I went into a Bank of America branch and was told that no one there could discuss my account with me and that I’d have to wait three days for a financial consultant with the appropriate credentials to arrive onsite. After securing a slot on the schedule of the woman with all the right licenses, I left the bank frustrated.
Three days later, I sat across a large desk from a woman drinking coffee and shaking her leg. We were in an office that was defined by four glass walls. After she lightly tapped the fake oak desk for at least the 500th time with her heel, I asked the woman about my IRA’s dismal performance. I wanted advice about how to improve my account’s rate of return. I was not amused when she smiled at me and said that, given my account’s current low balance, I should withdraw my money and take my family out to dinner.
I was incensed when the woman laughed at her own joke … at my expense. I regained my composure and asked her for suggestions about how I might reallocate my investment to recoup some of my losses and decrease some of the bank’s management fees. She responded by telling me that her time was more valuable than any commission she would receive by me moving my money around. Then, she excused herself from the office.
Convinced the Bank of America representative would return, I sat in the glass office for forty-five minutes. Finally, I got up and walked out of the building. I was embarrassed and angry, really angry.
I walked across Bank of America’s parking lot and into the neighboring credit union. It took less than an hour for me to sign all the paperwork necessary for my funds to be moved out of the IRA I had with Bank of America and into the account I established with the credit union. Before I left, the person who had set up my new IRA made an appointment to meet with me three months later to review the account’s performance. I was relieved.
In the years my IRA was with Bank of America, I had met with two people on separate occasions because I instigated the meetings. Between opening my IRA and my meeting with the adequately credential woman, no Bank of America employee ever approached me about my account’s performance. In the three years my retirement money has been held by the credit union, I have met with the woman who opened my account nine times. She has helped me to recover approximately 30 percent of what I lost after the economy began to struggle. I am looking forward to working with her for many years to come.
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