Ask Terry Questions Retirement


By Terry Savage on June 21, 2018 | Financial Planning / Retirement

My employer is closing out their pension fund and will be distributing all funds to the employees.
I am 55 years old and would like to retire at age 60. In your opinion what would my best option be
for investing this money. There’s so many different opinions out there. Of course I’m trying to limit
fees and risk. Thank you for your time.

Terry Says

Well, you’ll want to do a direct rollover to a low cost place — like Fidelity, Vanguard, or T. Rowe Price. They’ll handle all the work for you so you don’t have taxes and penalties. Go directly to them — without a broker or adviser. Then you will have to choose among their mutual funds. I would suggest putting about half in one of their Equity-Income funds, and perhaps 30 percent in just a short-term (3 years or less) bond fund. And the remaining amount could go half and half into an S&P 500 index fund and a money market fund.

Yes, there is risk in the stock market. But you’re gong to be retired for a long time, and you’ll need the growth that stocks provide over the long run. And keep working as long as you can and saving more money in a separate IRA. Age 60 might be a bit young to retire, given the potential impact of inflation and longevity. Remember, you can never have “too much.”

Recent Financial Planning / Retirement Questions



a personal
finance question