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So, I’m about four years from my planned retirement date. I hope to retire at 63. I’ve only invested in a company 401k and have a pension and then SS. My question is how would you handle the money. Would you let it set in the company account or roll it to other financial institutions? I really don’t like paying financial advisors more than they are worth because I feel they are out to get rich off us. I think I’d rather put it in something low cost that I can use the money as I need. Any suggestions on that?
I’m still wondering if I should draw from all three or just two. The 401k is down overall due to the market tanking. I believe I’ll bring in about 50k without 401k so I can do ok until it bounces back. Or just take 2% from it to put more in my pocket without depleting it while it’s done. Any advice would be appreciated. I just don’t know where to start.
So, I’m about four years from my planned retirement date. I hope to retire at 63. I’ve only invested in a company 401k and have a pension and then SS. My question is how would you handle the money. Would you let it set in the company account or roll it to other financial institutions? I really don’t like paying financial advisors more than they are worth because I feel they are out to get rich off us. I think I’d rather put it in something low cost that I can use the money as I need. Any suggestions on that?
I’m still wondering if I should draw from all three or just two. The 401k is down overall due to the market tanking. I believe I’ll bring in about 50k without 401k so I can do ok until it bounces back. Or just take 2% from it to put more in my pocket without depleting it while it’s done. Any advice would be appreciated. I just don’t know where to start.
First thing that may change is your relationship with your bank. You do have checking, savings account.
Depends what your sources of income will be. Maybe you have pension paid on 1st of month. From the 401K maybe rollover & convert into something that pays 15th of month. Social Security depends on your birth date for a Wednesday to be paid. So maybe you go from 1 paycheck per month to 3 or more deposits. The $50k amounts to $4k/month?
From your company most likely managed by some financial institution. If they deal with Fidelity becomes easy to rollover & convert. When you do that you have more options in what funds to invest in.
Don't know your budget. Good time to investigate what you get from Social Security & what you will need to spend for Medicare.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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I’ll bring in about 50k without 401k so I can do ok until it bounces back.
I just don’t know where to start.
You start with...
How much will I need? (You might need a budget, but it's fine to use your current spending as a guide)
How much do I have? (Only you know that)
Where's it going to come from? (likely various sources)
When is the opportune time to withdraw from where? (run tax obligations and investment growth scenarios) Takes about 2 hrs. I chose to live in an income tax free state to simplify my tax concerns.
I will keep my 401k with Fidelity until the bitter end (or RMD / age 72). There are liability protections in doing so, and I have plenty of investment choices there and adequate accessible bucks elsewhere.
been retired ~29 yrs (since pre age 50) - no pension, no HC
Lived off savings, Property and asset selling, a few PT gigs, rental investment properties
Haven't taken any 'qualified' withdrawals (yet)
Will first draw down any tIRA (Taxable) to reduce RMD
Continue to do Roth rolls (up to digestible tax rate (12% for me))
SS at FRA (due to non0working spouse needed to claim 50% of mine, otherwise I would have waited until age 70.) There is no perfect formula - it all works out about the same in the end (unless you live to age 93+, then it's slightly better to wait on SS)
Have begun selling income props and carrying the paper = same as rental income, but no more gains, and no more toilets to clean.
Will finally withdraw from Roth (if I need too), otherwise it is tax free for my heirs / charities.
After being retired 2 decades I have about 3 - 4x more assets/ NW that when I quit my wage income job. (Lucky I guess) Planning but not obsessing. Living same or better QoL as a retiree, but I do miss paid vacation and company paid travel. There is nothing we want for, but we're not too extravagant. Travel >50% of the time.
I found costs very similar to being employed and raising and feeding a family. No big shocks / changes. Still have a <3% mortgage (much cheaper than rent). Plan to rent in old(er) age (age 80+).
Practice retiring SOON!, I practiced a lot! (took a few 1 yr leaves without pay, as well as many 6-12 week breaks with no pay).
Much more financial management advice over at bogleheads (investing / advising forum). C-D is a 'relocation' forum, finances is a small subset of the relocation discussion.
It's not hard to manage your own finances. (Hint: your employer is not currently doing it for you)
look up lazy portfolio, 3 or 4 fund. It meets or beats most of the best financial managers (for free)
Rebalance annually or every qtr.
Find the cheapest subscription to the Wall Street Journal and read it voraciously 6 days a week.
Lots of retirement advice.
We have all our money at Fidelity and pay 0.17% in fees.
Ideally, you would have spent the past couple of decades learning about investing and finance. But, better late than never.
Ideally, you should plan to read about 6 books per year on investing and on managing money in retirement. If you use the search function on these boards (retirement, economics, investing) you'll find several threads with book recommendations.
So, I’m about four years from my planned retirement date. I hope to retire at 63. I’ve only invested in a company 401k and have a pension and then SS. My question is how would you handle the money. Would you let it set in the company account or roll it to other financial institutions? I really don’t like paying financial advisors more than they are worth because I feel they are out to get rich off us. I think I’d rather put it in something low cost that I can use the money as I need. Any suggestions on that?
I’m still wondering if I should draw from all three or just two. The 401k is down overall due to the market tanking. I believe I’ll bring in about 50k without 401k so I can do ok until it bounces back. Or just take 2% from it to put more in my pocket without depleting it while it’s done. Any advice would be appreciated. I just don’t know where to start.
The first thing you do is figure out what you need to live on. Not a guess. Use one of the MANY free retirement calculators to put in your specific monthly expenses, and your investments/savings and their projected growth.
Pension and Social Security can be seen as your bond portfolio so I would invest the 401k in ETF's at a broker such as Schwab or a mutual fund such as Fidelity or Vanguard.
The online sites for the above will offer education on investing and have funds set up that will make the decisions for you at a very low cost if you do not want to do it your self. Remember you are still a long term investor as you could have another 40 years in retirement.
I would let the 401k grow if you do not need the money. At some point you will have to take money out due to the distribution rules. This will affect your taxes so you might want to take out some in years your taxes will be low and you can reinvest in the same securities you had in the 401k if you like. That will also get you to capital gain rates.
I would use the money, assuming not needed for day to day expenses, for travel, new car etc.
You mentioned a down market. That is why you have an emergency fund or maybe better said a fund to cover you "extra" cash need for lets say the next five years. The object is not to have to sell stock in a down market.
Does your 401k plan offer free financial advice? If it does it probably covers more than just the investments you pick so I would start talking about your life needs with that advisor.
Remember you pension might not have an inflation factor. Also inflation can outpace SS and pension adjustments and that is one reason to delay spending some of the 401k money.
We are couch potato investors and do not care to know how the sausage is made…only what the results are. We scraped everything into a pile and gave it to an Edward Jones representative who we trust and like. They will have you fill out a risk assessment and gear the investments according to your comfort level. We paid a 3% up front fee, and there has never been any of the investment shuffling you have fear of. Every year we have a meeting and once every few years there is a rebalancing, if necessary.
Talk is cheap. You can meet and ask your questions until you feel comfortable.
For sure, I would not leave my 401k in the company. The company could fold and the money could be gone.
We take about $13k a year out, and stay even or grow the principal, depending.
We are couch potato investors and do not care to know how the sausage is made…only what the results are. We scraped everything into a pile and gave it to an Edward Jones representative who we trust and like. They will have you fill out a risk assessment and gear the investments according to your comfort level. We paid a 3% up front fee, and there has never been any of the investment shuffling you have fear of. Every year we have a meeting and once every few years there is a rebalancing, if necessary.
Talk is cheap. You can meet and ask your questions until you feel comfortable.
For sure, I would not leave my 401k in the company. The company could fold and the money could be gone.
We take about $13k a year out, and stay even or grow the principal, depending.
The bolded is not true. 401k funds are not co-mingled with the company assets.
The Employee Retirement Income Security Act (ERISA) requires 401k plan assets to be held in a trust account, apart from the employer's assets. This was put into place after retirement funds did disappear when companies folded.
DH kept his 401k plan with his employer, a large corporation. Because of its size, the company has low fees, and many plans to choose from that meets his needs. I rolled my 401k into Vanguard IRA since my company was small with higher 401k fees and limited choices.
It is likely premature to contemplate where or how to invest.
Step #1 is always to assess your personal risk tolerance. There is no right or wrong answer here. Google "investment risk tolerance questionnaire" and you'll see many examples. Start here. https://www.google.com/search?q=inve...t=gws-wiz-serp
Only by understanding your personal risk tolerance can you place yourself on the following chart and subsequently determine what type of investments are reasonable for you:
Last edited by moguldreamer; 10-04-2023 at 10:07 AM..
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