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Old 11-12-2017, 12:23 PM
 
2 posts, read 987 times
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I will be retiring early next year after 27 years with a defined benefit plan. I will get 67.5% of my current salary and pay health insurance at $200 a month. I live in Illinois (for now) so my retirement income is not taxed by the state. I owe about 90,000 on my home which is worth about $230,000 at 3% interest. I have no car debts or credit card debts. My monthly check before fed tax will be about $9,000 a month. I also have about $250,000 in a 457(b) that is spread through several mutual funds.

My question is, upon my retirement, I can no longer add money to the funds. My monthly check will more than cover the bills so there is no need for me to draw from deferred comp. My questions are, should I keep the deferred comp in the mutual funds or move them to a safe fixed account of 3.5%? I could take out $1k a month and it would last over 30 years. (That is if the calculator I used was correct) I could leave it in the funds and let it grow, but my concern would be if the market tanks, I won't be able to dollar cost average like I have in the past to recoup the loss.

I know these are good problems to have and I would really appreciate any thoughts on which way to go. Thanks for any thoughts or opinions.
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Old 11-12-2017, 01:54 PM
 
897 posts, read 1,520,475 times
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I have also after 401K etc gone with "deferred income" savings over my working career. I am retired with a pension and $700,000 in deferred income that I have chosen to receive over the next ten years. These funds are at risk if my previous employer goes belly up. Some level of concern on my part but cannot be changed as I locked in on that method of payout. I think I am OK with the risk but there still is part of me that says 10 years is a looong time.
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Old 11-12-2017, 04:03 PM
 
Location: Florida
4,356 posts, read 3,692,049 times
Reputation: 4084
Remember inflation.
I would keep it all in the stock market since you do not seem to need it now. Just be sure to have an emergency fund.
If the market tanks (and it will ) you just wait until it recovers.

You may benefit from an hourly financial planner to review your plans and give you investment suggestions.
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Old 11-13-2017, 01:05 AM
 
Location: Las Vegas
747 posts, read 567,635 times
Reputation: 1518
Max it. Buy service credit if you can. That got me a nice retirement almost four years ago at age 56. Learn to live on less so you can max it. It is really hard to see peers who spent their money on gifts and Disneyland for their kids and grandkids who not cannot afford to retire. Max it. Kids don't need Disneyland that bad.
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Old 11-14-2017, 11:45 AM
 
Location: Northern panhandle WV
3,007 posts, read 2,168,437 times
Reputation: 6691
Quote:
Originally Posted by caco54 View Post
I have also after 401K etc gone with "deferred income" savings over my working career. I am retired with a pension and $700,000 in deferred income that I have chosen to receive over the next ten years. These funds are at risk if my previous employer goes belly up. Some level of concern on my part but cannot be changed as I locked in on that method of payout. I think I am OK with the risk but there still is part of me that says 10 years is a looong time.
Can't you roll your 401K over into an IRA that you can manage yourself and would not be subject to employer going belly up?
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Old 11-15-2017, 07:18 PM
 
2 posts, read 987 times
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Quote:
Originally Posted by arwenmark View Post
Can't you roll your 401K over into an IRA that you can manage yourself and would not be subject to employer going belly up?
I have a government job so I don't think it's going to go belly up. I'm not sure how I would able to transfer it to an IRA to manage it myself. I think I can just leave it there and not be able to contribute to it.
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Old 11-15-2017, 07:34 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,537 posts, read 39,914,033 times
Reputation: 23641
If you understand the projected future performance of the Deferred Plan (likely if GOV)

1) you can decide if you need / desire greater performance and many companies will help you get your MONEY!!!... (Fidelity and Vanguard may be your best 'friends' in this case). Quite simple to elect to roll to Self Directed IRA (but be prepared to MANAGE it!)

2) You can let it sit / ride out the term and performance.

3) Since you may not NEED it... you can DONATE it on a schedule that will enhance your tax situations each yr. (I use a Donor Advised Fund for this, both Vanguard and Fidelity have them, as does your local Community Foundation). My kids will get the successor designator role (Give to charities of their choice)
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Old 11-16-2017, 05:30 AM
 
897 posts, read 1,520,475 times
Reputation: 1875
Deferred comp is different than a 401K and cannot be "rolled over".
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Old 11-16-2017, 06:39 AM
 
Location: Omaha, Nebraska
7,295 posts, read 4,148,032 times
Reputation: 18259
If you have a governmental 457(b) you should be able to roll it into an IRA after you retire from your workplace. If it's a non-governmental 457(b) you can't - plus it's exposed to creditor risk if anything happens to your employer. So I'd suggest finding out exactly what kind of 457(b) you actually have first. That may make a difference in how you decide to handle the money.

(The government should really give completely different names to the two types of 457(b)s, as they really don't have a lot in common apart from being funded by deferred compensation.)
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