Ask Terry Questions 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.

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