Ask Terry Questions fully vested 401

fully vested 401

By Terry Savage on December 27, 2018 | Financial Planning / Retirement

What should I do with my fully vested 401. I am retired & have lost a lot of money in last 3 months? Thank you.

Terry Says

I have pointed out many times that 40l(k) plans are designed to include investments that GROW your money, because they are aimed at younger workers.   And I  always suggest that at retirement you ROLL your 40l(k) account into something more conservative.  AND THAT IS WHERE TROUBLE CAN START!   There is an army of salespeople ready to literally attack you to convince you they should provide products and services to invest your rollover.  AVOID THEM.

Pick up the phone and call Fidelity or Vanguard — (1-800-FIDELITY or 1-800-VANGUARD) and they will handle the direct rollover so there will be no tax issues.  They will also help you invest the money at no cost to you.  Put at least one-third of it in a money market mutual fund, where you can’t lose a penny.  Then perhaps one-third in an “equity-income” fund that should grow your money over the years of your retirement.  Talk to them; they will make suggestions.  And when you reach age 70-1/2 they will remind you of the amount you must withdraw annually.

You do need some stock market exposure for growth during your retirement years.  But you also need to set some money aside so you can sleep at night an enjoy that retirement!

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