401K at retirement

Terry Says

No, as long as you’re in the 40l(k) you must choose one or more investments offered within the plan. Now, since most of these plans are designed for younger workers, who have a long-term time horizon, the choices are mostly in stocks or a few “balanced” funds.
That’s why I always suggest retirees roll over their 40l(k) plans to an IRA — preferably at Vanguard, or T. Rowe Price, or Fidelity. Those organizations will handle the rollover for you, making sure you are not subject to taxes. And at these fund companies you’ll have a choice of low-cost and much safer funds for at least a portion of your retirement account. I’ve long recommended keeping at least 20 percent of your money in a money market mutual fund if you are a retiree. That will cover the need to withdraw when the market is down. And it will let you sleep at night with the rest of your stock market exposure. But even that market exposure should be in a balanced fund, depending on your own risk tolerance and withdrawal plans.