401K Contributions for older folks in the midst of possible recession
My husband will be 65 and contributes the maximum allowed (good % match from employer)to his 401K. He feels secure in his engineering job and wants to work for several more years. Is there a safer place to invest (at our age, if there will be a recession) instead of the 401K? Our CPA tells us to seek advice from our Financial Adviser & the Financial Adviser tells us to ask the CPA! Thank you,
Terry Says
HaHa! No one wants to be responsible. So the first thing you should do is find the “safest” investment INSIDE the 40l(k) plan. Is there a short-term bond fund or a money market fund option? Then, since you’re so close to retirement, you’d want to move some existing money into that safer option. (Typically there are few of these options in a 40lk plan because they are designed for younger people who have more time on their side.)
And yes, he should keep contributing because of that generous match! You don’t want to miss out on that. And you won’t be required to withdraw until age 75! So you have time to recover from any interim bear market.
That said, it would be wise to build up your savings OUTSIDE the retirement plan, and keep it safely ina money market deposit account at your bank. So, basically, a little of both!
