Money choices and who to trust with retirement

[twinkletwinkle22]

Sirhuntsalot

Being 4 years from retirement is great compared to retiring right now when there is a lot of uncertainty in financial markets, bonds especially.

Time is your friend, to learn what market sectors (stocks, bonds, real estate etc) are the safest for retirement accounts because you won't be adding more money into them once you retire, you'll be "managing" your money for the next 30 years with the help (or not) of financial advisors.

In general most people don't see good enough results from financial advisors who charge a fee but you'll make your own decision on that.

In general most retirees have most of their money in stocks and bonds but there are lots of variations and different percentages in each. Owning ALL the stocks using a fund like VTI is popular along with owning ALL bonds in a fund like BND is also popular. But "what % of your savings should be invested in what" is your question.

Good luck on learning how to manage your money for a happy retirement.

[springfieldva]

I think that a visit with a financial advisor is usually a good thing.

You've been working hard and spending all of these years building a good nest egg for your retirement. It's always good to have the advice of an experienced professional.

You don't want to find out at tax time that you should have done this, that or the other thing instead.

Anyone can put money away in a 401k and IRA. Pretty much all of us will have earned a social security check. If you've earned yourself a pension, too, even better. But figuring out what to spend and where to pull money from can be mind boggling. It requires a big picture approach.

[Kathy884]

I'm three years from when I plan to retire and am planning to move my 401K when I retire to my Fidelity Rollover IRA. I moved 401K monies there a good 20 years back when I changed jobs, so that's why I have that account, even though I haven't retired yet.

There is a lot of flexibility in what you can invest in and fees are lower than the fees I am paying in my company's 401K for similar investment products (mutual funds, etc.) If you are comfortable and want to make your own investment choices, I like Fidelity, Vanguard, and Charles Schwab. I'm sure there are many other choices, but those are three I am familiar with and have money in or a family member with money in those.

That's really cool that you have a pension. Fewer and fewer people have those these days. My brother who is 61 is retiring next year after 39 years of service as he has a nice pension as well as a 401K. I'm envious of both of you.

Another decision is what age are you going to take Social Security. DH is retired but isn't taking his till next year when he is 70 to maximize his benefits over his projected life expectancy. He in the meantime is drawing from investments.

I'm probably going to take my Social Security at age 66 when I retire which is my full retirement age. And then I'll draw from investments additional monies so what I am getting is similar to what I currently make right now as take home pay plus pay the taxes. I also plan to in retirement take the same 15% of my income that I was putting in a 401K when working into Roths -- give DS $6500 to invest in a Roth and do the rest as a Roth conversion in my name, and hopefully not touch that and have DS inherit the Roth. In projections that I've run from Empower and Fidelity, I should be in good enough shape to have my retirement monies match my working income plus the additional amount of money DH and I will need to have to pay for Medicare Part B and a supplement (I really hate paying all that money, but good health insurance is a necessity). I have to say it will be a really weird feeling to take monies out of investments instead of putting monies into investments. I've thought about keeping on working (two of my full time co-workers have done that - they are both 73). I like my job, but I am not passionate about it and even though I don't have a really good idea yet of what I would like to do in retirement, I feel like I owe it to myself to do some different things (hopefully health, energy, etc. will remain and give me that opportunity).

It's good that you are thinking about this now. Lots of community colleges have classes like Retirement 101 and you might enjoy looking into something like where basics of the topics you are wondering about are discussed.

[StealthRabbit]

Originally Posted by springfieldva

I think that a visit with a financial advisor is usually a good thing.

...figuring out what to spend and where to pull money from can be mind boggling. It requires a big picture approach.

Fidelity ran several E-money scenarios for me*, based upon the changing financial needs of each decade of retirement.

It was pretty clear on:

1. Where to draw income from different investments and sources during which 'season' of retirement.
2. Tax implications of drawing from those sources (Including the sales of personal and investment properties)
3. When to draw SS
4. When to do Roth rolls (Tax impact and growth value of choices)
5. How to structure RMD's (including QCD's)
6. estate planning for inheritance

Those scenarios reside in my resources, so I can view and ask them to run other options when / if needed.

* at the time, I was reviewing whether I wanted a Fidelity Advisor service (Which I did not choose, at their recommendation)