A Deferred Retirement Option Plan is "rollover" eligible if it is deemed "qualified" by the IRS
. Your employer can tell you whether or not the plan is amenable to a rollover.
Assuming that the plan is eligible, then the obvious tax-deferred move is to a traditional IRA
account at a major investment house (Vanguard, Fidelity, etc.) -- because, that's just a cash transfer, after which you can do whatever you want with the money. And, the IRA rollover has no disclosed or undisclosed sales
Once you have the money in a separate account, you can diversify your investment into whatever you wish.
As for what exactly to invest in, that questions boil down to (1) how soon will you need to use this money, and (2) what is your appetite for risk?
The sooner you need the money, the more conservative your investment. The easier you can sleep at night knowing that you could get crushed in a market reversal, the more aggressive your investment.
Annuities have huge undisclosed commissions. You can accomplish practically the same thing as an annuity by instructing your IRA custodian to make distributions
of "substantially equal" amounts based upon your life expectancy. Meanwhile, you can still invest the money as you wish.
In my personal
opinion, the safest all around investments are well-diversified direct investments into corporate and/or state
general obligation notes/bonds (because, at least for the present, states cannot file bankruptcy
on their debt, whereas cities and counties can). I don't like U.S. Treasuries because they are not state tax exempt
, and because at the moment, the return
on investment is horrible.
Bond funds are a bad deal, because you have no control over your investments.
There is one absolutely certain thing about the market. If you invest all at once, you will get beaten, because the market makers adjust the market short term against anyone who makes a big one-day investment. Whereas if you break your investment into about 12-24 parts and then invest over a long period of time, you end up with an average of high and low purchases which provides a far superior long-term return.
Anyone who tells you to put all of your money into any particular investment, whether an aggressive growth vehicle, annuity or a conservative balanced asset
fund, is selling spoiled fish -- in my humble opinion.
Hope this helps.