Moving Stock 401k retirement funds to a safer fund assuming stock rates will drop this year.
Hi Terry,
I woke last night and listened to your comments at 1pm on the radio. I am 65, recently retired and concerned that the value of my 401k and 403b stock mutual funds will drastically fall this year. Is there a safer type of fund that would hold their value in a downturn? I heard it would not be advisable to move to bond funds now that interest rates are rising. One of the funds is a Fidelity Contrafund with high fees. I would like to rollover the funds so I don’t have a taxable event.
Terry Says
Once you’re retired, it’s very advisable to roll over all your old 40l(k) plans to one ROLLOVER IRA. I’d start by calling Fidelity and asking them to help you do a rollover. They will handle all the details, so have your account information handy when you call. They will contact your current40lk and 403b plan custodians.
As to what to own — the idea is to transfer CASH, not funds. There is NO tax consequence to selling. So if you’re worried, tell your current custodians to transfer all your funds into a money market if they provide one. Fidelity will take all the cash and then work with you to figure out which conservative funds would be appropriate for you at this stage of life.
Have you done a financial plan? Do you have a current estate plan and health care power of attorney? If not, and you don’t know who to trust, then go to Wealthramp.com — where you will be matched with a fee-only fiduciary financial planner who is not tryng to sell you something. You can trust them.
But start the rollover process first, especially if you’re worried about the market exposure. And by the way, you want to be OUT of bond funds when the Fed is raising rates, which it is doing now!!
You can do this! Write back if you get confused. My direct email is Terry@TerrySavage.com — Sorry for the delay in responding. I was swamped after that show!!
