Ask Terry Questions Where to put 401K

Where to put 401K

By Terry Savage on November 23, 2019 | Investments

Dear Terry I have very little money and I am in my second year of retirement(retired at 67). Many things have happened since retiring but I will make it. I have $18,000.00 in 401k funds sitting in Fidelity making very little interest. Where can I put this money, that I will not use for quite a while, so that it can grow? I have a credit union bank account that offers high interest on cd’s. I am afraid of putting my only extra savings in a safe and growing place. Please, whatever guidance you can give will be appreciated, Thank you for your experience.

Terry Says

You are asking for two IMPOSSIBLE things to have at the same time: Growth and Safety. So let me start by asking you “how much of this money are you willing to lose?” If your immediate answer is NOTHING, then this money belongs in safe, low-yielding money market accounts or CDs.

Now, here’s the second question: Are you sure your money is in a 40l(k) at Fideiity? Is it in your former employer’s plan? The investment options inside company 40l(k) plans are designed for growth — and that involves some risk. You likely won’t find a “safe” place to hide inside that old plan. Instead ask Fidelity to do an IRA ROLLOVER — taking it out of the plan and directly moving it into an IRA. Then, you can tell them you don’t want ANY risk –and just to put it in a government securities money market mutual fund. Nothing else!! Don’t let them talk you into “managing” your money, or into other funds. The most important thing is to keep it growing tax deferred in the rollover IRA — and not to lose a penny in risky investments.



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