what to do with 500k in many different accounts
Terry,
My and I have 500k spread across a few 401k accounts. We are both 62 years old, have a pension income of $3600 a month. Do we put all of this money together? How can we begin to draw $1500 a month? How can we be certain we don’t lose any money in this economy?
Thank you
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Terry Says
Those are a lot of questions. First, I’m going to assume that you are retired from work at all of those companies that sponsored 40l(k) accounts. (You can’t roll over from the company you might still be working at.) If you’re retired or have left previous companies, that means you can roll them over into one IRA Rollover account. I’d recommend contacting a place like Vanguard or Fidelity and asking them to handle the paperwork for a direct rollover so you don’t get involved with taxes.
BUT, that still leaves you with the decision of how to invest the money in the account. Depending on the amount total in your account, those places may give you general advice. But you don’t want to go to one of their “advisors” because you will either pay fees, or be invested in the same funds that charge higher fees (hidden) for the advice you get.
Of note, you are relatively young to be “retired” and not earning money any more. And that’s jus tmy guess, since you mentioned you are receiving pension income. Over the long run, stocks have outperformed inflation. So while you might want to be conservative and “not lose any money”, you still need some growth to offset the inflation we are having. And that does involve risk. I’d recommend putting about half in an “equity-income” fund, and then you can leave some in a money market fund inside your IRA.
You won’t be required to take withdrawals from this rollover IRA for at least 10 years. Meanwhile, it will continue to grow tax deferred. And please don’t take SS until full retirement age. Taking it earlier would be a huge mistake.
If you want someone to help you through all this and more, go to Wealthramp.com, where you will be matched with a fee-only FIDUCIARY financial advisor you can trust. These are important decisions and a good plan will help.
