U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-13-2016, 03:39 PM
 
Location: rhode island
33 posts, read 22,859 times
Reputation: 42

Advertisements

I have a 401k that fluctuates quite a bit and mostly to the downward side even though its pretty evenly balanced, im very close to retirement and would like to keep what I have stable. my question is should I take it out as a lump sum and roll it into an ira and draw my monthly payments from that.
Reply With Quote Quick reply to this message

 
Old 03-13-2016, 03:44 PM
 
Location: VT; previously MD & NJ
2,232 posts, read 1,370,288 times
Reputation: 6473
Quote:
Originally Posted by daves 57 View Post
I have a 401k that fluctuates quite a bit and mostly to the downward side even though its pretty evenly balanced, im very close to retirement and would like to keep what I have stable. my question is should I take it out as a lump sum and roll it into an ira and draw my monthly payments from that.
The fluctuation is because of the funds you have in your 401k and the fluctuation of the stock market in general. I'm sure you could look at the other fund choices your 401k offers to see if something else suits you better. If you transfer the money into an IRA, you will still most likely be putting them into funds within the IRA account.

A 401k and an IRA are just "holding" accounts in which your investments (funds, bonds, etc) are held.
Reply With Quote Quick reply to this message
 
Old 03-13-2016, 03:49 PM
 
Location: Central Massachusetts
4,800 posts, read 4,866,680 times
Reputation: 6379
Quote:
Originally Posted by daves 57 View Post
I have a 401k that fluctuates quite a bit and mostly to the downward side even though its pretty evenly balanced, im very close to retirement and would like to keep what I have stable. my question is should I take it out as a lump sum and roll it into an ira and draw my monthly payments from that.
In addition to ansible90's points your 401k could have lower fees to deal with. As long as they are matching you should remain in there unless they are not.
Reply With Quote Quick reply to this message
 
Old 03-13-2016, 04:31 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,718 posts, read 40,113,239 times
Reputation: 23868
401k's can be very different, very restrictive on options, & bit expensive on management.

It is not ez, or always availabe to convert 401k to self directed IRA while with same employer.

Be wise about your management skills / desire, you may choose to use a mutual fund or managed IRA.

In general.... Yes.... As soon as you leave your employment... Roll your 401k, and maybe your deferred pension / profit sharing plan.

As far as withdrawals.... Be very wise, as to which 'qualified' funds you withdraw in which yr. taxation can vary considerably each year. i.e. ROTH vs Traditional, LT vs Short term, opportunity costs of existing investments.

Understand there are other IRA options than equities / bonds / money management.
My 50+ years investment experience showed my own dabbling in Real Estate was far more successful than my stock / equity management. Thus I rolled 10% of my quailfied investments into self directed Real Estate investments. Very strict Rules apply, never co-mingle funds or gain personal use / benefit!
Many IRA options exist under similar rules: business, art, collectables, airplane leasing.... One of my friends trades hotrods inside his IRA. Risky, but extremely profitable and interesting for him. Another keeps his war collectables such as Sherman tanks and 1/2 tracks in his IRA. (Not me I would be too tempted to use them!, vacation homes won't work in IRA either)

Enjoy your trip to 'home plate'
Reply With Quote Quick reply to this message
 
Old 03-13-2016, 05:08 PM
 
Location: VT; previously MD & NJ
2,232 posts, read 1,370,288 times
Reputation: 6473
One more thing. If you do decide to roll the 401k to an IRA, be sure to do it as a rollover from one account to the other. Do NOT withdraw funds from the 401k and then try to open an IRA with the money. That will generate taxes big time if not done right. Let the bank or investment company handle the rollover.
Reply With Quote Quick reply to this message
 
Old 03-13-2016, 06:42 PM
 
Location: Florida -
8,777 posts, read 10,885,544 times
Reputation: 16675
Once you retire, you will probably have no choice, but, roll over your 401K account into an IRA
Reply With Quote Quick reply to this message
 
Old 03-13-2016, 06:58 PM
 
Location: Florida
4,391 posts, read 3,730,501 times
Reputation: 4134
Quote:
Originally Posted by daves 57 View Post
I have a 401k that fluctuates quite a bit and mostly to the downward side even though its pretty evenly balanced, im very close to retirement and would like to keep what I have stable. my question is should I take it out as a lump sum and roll it into an ira and draw my monthly payments from that.
The 401k fluctuates because of the investments you selected. From your question it seems like you have tried to pick stable investments but the 401k does not have the investment choices you would like. If that is correct and you have identified more stable investments that you could purchase in an IRA I would move it. (TRUSTEE TO TRUSTEE, nothing goes to you)

However your question suggests that you might be selling part of the 401k every month or so to get the cash you need in retirement. This is a bad practice just for the problem you identified - the 401k fluctuates.

I would think you should have two or three years of your expenses not covered by SS, pension etc in cash so you do not have to sell in a down market.

I would also expect a down market for a year or two starting in 2017. I am guessing and hope I am wrong. I mention this as you should plan on the down market in figuring out your retirement budget.

You might want to hire a fee only financial planner to review your retirement plan and make sure you have not missed anything. I am thinking of a one or two meeting review and not someone that manages your investments.
Reply With Quote Quick reply to this message
 
Old 03-13-2016, 11:16 PM
 
Location: Southeastern Pennsylvania
996 posts, read 867,517 times
Reputation: 2298
Since you're still working, is there an employer match for your contributions? If so, keep contributing to the 401(k). When you retire, you can roll it over into an IRA. But, as previously noted, you need to make good investment decisions regardless of the label. If your 401(k) is not doing well, especially over the past few years, it's because you haven't chosen funds that perform well.

For your IRA rollover, consider Vanguard index funds. Among the lowest cost in the industry.
Reply With Quote Quick reply to this message
 
Old 03-14-2016, 05:09 AM
 
Location: Central Massachusetts
4,800 posts, read 4,866,680 times
Reputation: 6379
All are good advice. Ansible90 is very right make sure you do a trustee to trustee transfer. Do not, and we cannot stress this enough, do not allow one trustee to send you the money in a check. If they do void it and return immediately and do not cash it. Then get it done properly.


As for having to move your accounts that is not always the best idea either. Sometimes the grass is greener at home. If your 401k is invested right and has low fees than it is just as well to keep it there. Self directed IRA's are okay as well but be wary of unscrupulous salesmen trying to sell you a product that they get commissioned for. That is almost never a good combination.
Reply With Quote Quick reply to this message
 
Old 03-14-2016, 05:25 AM
 
3,722 posts, read 3,144,315 times
Reputation: 7939
Quote:
Originally Posted by StealthRabbit View Post

Understand there are other IRA options than equities / bonds / money management.
My 50+ years investment experience showed my own dabbling in Real Estate was far more successful than my stock / equity management. Thus I rolled 10% of my quailfied investments into self directed Real Estate investments. Very strict Rules apply, never co-mingle funds or gain personal use / benefit!
Many IRA options exist under similar rules: business, art, collectables, airplane leasing.... One of my friends trades hotrods inside his IRA. Risky, but extremely profitable and interesting for him. Another keeps his war collectables such as Sherman tanks and 1/2 tracks in his IRA. (Not me I would be too tempted to use them!, vacation homes won't work in IRA either)

Enjoy your trip to 'home plate'
I have a question about this. I have seen several people buy vacation rental properties in their self-directed IRAs. I suspect some of them occasionally use their rentals for their personal use, strictly against the rules. How can they be found out? Is there a branch of the IRS that investigates occupancy of rental property in self-directed IRAs? If so, how would they ever be able to figure out that an owner used his property a couple of times in a year in which the property generated rental income?
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top