Ask Terry Questions Retirement/401k

Retirement/401k

By Terry Savage on November 13, 2018 | Financial Planning / Retirement

I know u answer this all the time but……… my husband is retiring & has a 401k thru his job. Is it a good idea to leave things as is or not. He does not have a lot of money about 45,000.00 at this time. He has thought about having money come out every 6 months or so like a small bonus. If none of this is a good idea what would u suggest?
Thank you for your time…..
.

Terry Says

This is the most important decision you will make for your future. Typically, I suggest people “roll over” their 40l(k) account to a place that has more conservative investment choices than a retirement plan usually has. After all, a 40l(k) plan is meant for people accumulating money with a longer time horizon and more risk tolerance.
What REALLY worries me, is that some “financial planner” will get ahold of the rollover process and put you into a costly investment. You certainly don’t want to do that.
My own suggestion would be to call Fidelity at 1-800-FIDELITY and ask them to handle a “direct rollover” from your 40l(k) plan when your husband retires. And since you don’t want to lose a penny of this money, I am going to suggest you put it in one of their money market funds. You won’t get rich there, but you won’t lose money either.
I like your idea of taking money out a bit at a time, as needed. But recognize you will have greater needs later in life! And also, you know he must start taking a required minimum distribution (RMD) when he reaches age 70-1/2.
If you choose this route, it is very important to name a beneficiary for his IRA Rollover — and YOU should be the beneficiary!

Call and talk to them. They will handle all the paperwork. And if you have any questions, don’t hesitate to write in again.

money

ASK TERRY

a personal
finance question