Ask Terry Questions Retirement Money

Retirement Money

By Terry Savage on January 11, 2019 | Financial Planning / Retirement

I am 70 in 2019, retired, no mortgage, no credit card debt, children are adults. I have a 401(k) with my old employer approx. $380K. What fund at Fidelity do you recommend for this rollover? And why?
Also, I have approx. $50K in chicken money (not retirement funds) to invest in T-Bills. Should I stagger the maturities from 3 months, 6 months. I don’t like12 month option – too much can go wrong in 12 months. The same question with CD’s. Should I divey up the money btw T-Bills and CD’s and a Roth IRA? I can’t afford to lose this money and need it to grow safely.
Any recommendations on a financial advisor?
Thank you, Terry. Love your column, your WGN interviews, and your approach.

Terry Says

OK, this is why you need at least one meeting with a FIDUCIARY financial advisor. I can answer your individual questions, but you still need a withdrawal plan from your IRA, and an advisor would make sure you also have the appropriate estate plan. You don’t mention a spouse, but if you are married those things should be coordinated between the two of you. So, let me go for your questions, but I wish you’d go to where you can find a certified financial planner in the Chicago area who will put your interests first — and charge only a fee for consultations.

Definitely do a rollover of your old 40l(k) and I’d probably choose an Equity-Income fund, a bit more conservative than all stocks, if this is your only investment money. I can say that knowing you have some “chicken money” on the sidelines. Yes, buy some 3-month and some 6 month Tbills — read my recent article on how to do that.

You can do the same thing with CDs — but you can’t open a Roth IRA unless you have earned income. I’m assuming you already have one since you are retired. And unfortunately, you can’t buy T-bills in a “qualified” retirement account such as an IRA. So you’ll have to do CDs for the money in your Roth.

Again, all of this should be done in context of your life spending needs and longevity prospects. You do need some long-term growth that will be provided by stocks to offset future inflation. At a rate of only 3% annual inflation, the spending power of your money wll be cut in half in 25 years! And that’s certainly within your projected life span.

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