Ask Terry Questions Transferring a small 401k to CD’s

Transferring a small 401k to CD’s

By Terry Savage on October 26, 2023 | Financial Planning / Retirement

I have an approximately $18,000 401k that I no longer am contributing to due to my employer now offering a SEP that they match. Should I take that $18,000 and put it into CD’s? It is currently in an Edward Jones account not making any money. You have been saying CD’s are paying at least 5% which would be much better, right? I am 64, working full-time and don’t need that money for awhile, hopefully. Thanks so much for your input.

Terry Says

Do you still have your old 40l(k) — or have you already rolled it into an IRA at Edward Jones? The reason I ask is that they typically are not a custodian for 40l(k) plans.
Yes, you can do a direct rollover of the plan, wherever it is to a bank. Read this on how to do it:

The bank will treat it as an IRA rollover account and you can buy CDs. That will eliminate risk. And you can have some of your new SEP invested in the stock market for long-term growth. You’ll sleep better with the CDs, and won’t be tempted to sell out of stocks in your SEP when the market goes down. In fact, keep buying and you will buy more shares at lower prices if the market declines.



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