RETIREMENT
Hello Ms. Terry: I just turned 65 in January and I have been with a company for 27 years and thinking about retiring next year on July 3, 2023 The question I have is: If the company was bought out and I never rolled my 401K into the New Company, what is the best way I can do it?
I have a play dad who always helped me with allocating my money, he is now 95 brilliant but has his days and mornings mixed up. I only have about $94000.00 in Vanguard, and about $5500.00 in My Retirement Fund with the New Company.
I know nothing about stocks. So I feel stuck and honestly I do not have money that is whatever it may cost $3000.00 to $4000.00 for someone to help me. Can you please direct me to someone who would not charge as much? Also, I only have $4300 in a pension from this company. (unbelievable) I learned I can take the whole amount and I have to pay taxes or get under $100 a mo for the rest of my life!!!
Terry Says
OK, let’s take this step by step.
1. Contact the “old” company and tell them you are doing an IRA ROLLOVER of your old 40l(k) plan. DO NOT LET THEM SEND YOU A CHECK. Call Fidelity at 1=800-FIDELITY and tell them you want to do a 40l(k) rollover from your old employer. Give them the contact information at your former employer, your name, SS number, and account number with the old plan. They will handle the rest.
2. The money will be transferred in cash to the new plan. So Fidelity will ask you how you want to invest it. Tell them for the time being to put it in a government money market fund (earning next to nothing). When you get to that stage write back to me and I’ll give you separate advice.
3. Your retirement plan with the NEW company should be invested in a “balanced fund” –as you need some stock market growth. Don’t be scared if the market falls. Just let it grow –and keep contributing.
4. Do NOT collect SS until your full retirement age — which is close to 67.
5. Reconsider retiring, and work as long as you possibly can — because your life expectancy is another 25 years — and you don’t have enough saved to completely quit working. That’s a simple fact. Maybe you can go part time. But don’t lose this job!!
6. Don’t worry about the pension from the new company (I assume it’s from your “new” company.) As long as you are working, they will keep contributing –and it will grow in future years. But if it’s from the old company, there should be another choice: to ROLL the cash amount into a separate IRA. When you take that money OUT it will be taxable income. So, if it’s from the old company, ask what the “lump sum” would be –and whether you can do a rollover. Then write back with the amount of the lump sum and I’ll show you how to see if this is a “fair” deal.
There that should get you started– and it’s free advice! So follow it!!
