advice for someone already 65.

Hi Terry A lot of inquiries are how much should I save, 401K or Roth, etc. What if you are already past 65 and are on Social Security. Your options for saving are nil. But you have several hundred thousand dollars already saved in 401K’s and IRA’s. What advice would you give to people in my position? Any thoughts on this I would appreciate.

Terry Says:  You’re right. The picture really changes when the money stops coming in and starts going out!  I can remember my mother — who was a businesswoman — telling me that years ago.  Now, of course, you won’t have to start taking mandatory withdrawals until age 70-1/2.  And you don’t have to spend all that money.  And there’s nothing that says you can’t continue to earn more money.  Once you reach full retirement age it won’t be penalized.  So don’t give up on earning more, while letting your retirement assets grow and work for you.

BUT, as you’ve realized, your investment appetite for risk changes when you are no longer making regular retirement plan contributions.  As I wrote in The Savage Number, this is when you need some sophisticated investment and withdrawal advice.  The program that does this best is called Monte Carlo modeling.  And you’re better off going to one of the major mutual fund companies such as Vanguard, Fidelity or T. Rowe Price to get their personalized advice.

Actually, my first choice would be T. Rowe Price.  The service is free (if you have some assets there, easy to roll one of your IRAs) and you work with a financial planner.  They will do the computer modeling based on your goals, income needs and risk tolerance — telling you how to diversify your investments, and how much you can withdraw to give you the greatest likelihood of not outliving your money.  Try the process; you don’t have to do it if it makes you uncomfortable — but it’s worth getting their advice.  Then be sure to write back and let me know what you think!