Ask Terry Questions Retiree 401k

Retiree 401k

By Terry Savage on June 11, 2020 | Financial Planning / Retirement

I am 71 and retired. I have a CFP overseeing my 401k account of $ 1 million. I’m in the moderate category. I rode out the stock decline. Now I’m thinking of going into stable from now thru the end of the election. My advisor believes I should stay where I’m at. Am I risking too much with all the turmoil we are seeing in our government ? (Covid19, another shutdown, racial tension, business closures etc.). Thank you

Terry Says

Please, please read the column I just posted on my website, entitled Second Chances.

Now, I’m concerned about a couple of things. If you’re not still working, a good advisor would have long ago ROLLED OVER your 40l(k) plan into an IRA — because in an IRA you would have a wider choice of “safer” investments. 40l(k) plans are designed for younger workers who can take more risk and have a longer time horizon to grow their money, and are still contributing regularly so can take advantage of lower prices.
If you’re 71, and will have to start withdrawing next year, you are definitely not in that category!

You need some independent FIDUCIARY help. I can’t give you specific advice here because I know nothing about your total assets, spending plan, risk tolerance — and a bunch of other things that a true advisor would be asking. But, I believe your instincts are correct. So I will make two recommendations:

1. Find the “safest” choice in your 40l(k) plan — likely a stable value fund since most plans don’t include a money market fund. Then move about 40% of your money into that fund. You may miss out on some upside, but at least you will have safety for a good portion of your money. (And that’s assuming you don’t have a similar amount of cash in CDs or money markets OUTSIDE your retirement plan.)

2. Get a second opinion from a different financial planner. Go to to search for one. These are fee-only planners, who promise to put your interests first, and are carefully vetted. Have at least one meeting, if only to get a second opinion.

Then please write back and let me know what happens.

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