Ask Terry Questions Job Change 401K

Job Change 401K

By Terry Savage on May 29, 2020 | Investments

I am starting a new position June 15. I have $40,000 in a 401K plan. How and where should I invest these funds?
I am a big fan and enjoy your advice and updates on all mediums.
Thank you. Be safe Be well.

Terry Says

It’s a good idea to roll it over into an IRA rollover account. I suggest you contact either Fidelity or Vanguard and ask them to handle the process for you, so no taxable mistakes.

You’ll have to decide whereto put the money when you get it to them. I’d suggest moving it into a government securities money market fund — and then directing them to move $5,000 on the 2nd or 10th or some other date every month, into the S&P 500 stock index fund – -until you’ve moved all but $10,000 into the market. Of course, I have no idea what the market will be doing for the next 6 months as the money moves. But you won’t get in at the top with all of it, and you won’t get in at the bottom either!

Assuming you are under age 60, this strategy should work for you over the long run. If over age 60, I would just move half the money into stocks and let the rest sit in the MM fund.
And be sure to sign up for the 40l(k) at your new job!



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