Retirement 401K investments
We are currently both 68 years old. Our 401K is in the Russell 2000 at 75% stocks. I am very nervous about this election and want your advise on a safe haven for our money at this time. I know we are too much exposed in the stock market for our age. I would appreciate any advise from you. I watch you on channel nine news and believe that you are very knowledgeable . I do not trust the stock market at this time. Do you feel gold might be a good investment for part of our money? We currently have $280,000.00 in our portfolio. Thank you for your consideration.
Terry Says
OK, I understand your concern. But there are a few issues before you decide on an investment allocation.
First,if you are still working and in your 40l(k) plan, you can’t take the money out to move to another investment.
Second, while you are IN the 40l(k) plan, you are limited to the choices offered by the plan! Those are typically growth funds, because they are designed for younger people who have a long time ahead of them to go through the ups and downs of the stock market.
SO, if you are already retired, you can do a “direct rollover” of your account to Vanguard or Fidelity, paying no taxes, and keeping the money inside an IRA rollover account. That will give you a lot more choices, many of them more conservative ones.
If you are still working, you are stuck with the choices offered by your 40l(k) plan– and should move some of the money to the most conservative choice (likely a “stable value” or money market fund). Ask your plan sponsor which is the most conservative. I WOULD NOT move money into a bond fund now– because if interest rates rise, bond prices will fall.
Now, once you have figured out where your money is, and understand the options above, you need more than a decision about where to invest. You need an entire financial perspective on retirement — how much you will spend, how much you will be able to withdraw so you don’t run out of money before you run out of time!
That will determine your risk profile and the amount you should have in stocks. That’s the right way to approach it. And there are a LOT of salespeople out there just dying to give you advice and make money off of you! So I suggest you go to Wealthramp.com to find a FIDUCIARY, FEE-ONLY advisor to go through this process. The first meeting with any of the advisors will be free.
But this is a big decision at an important turning point in your life. We are about back to “even” in the stock market now — so this is a perfect time to start your plan.
