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After 25 yrs i just found out they dont need me. What do i do with my 401k? Company matched.i am 60 yrs old.

After 25 yrs with a company i just found out they dont need me. I am 60 yrs old. What do i do with my 401k , company matched.

Mar 05, 2015 by Luann from Toledo, IA in  |  Flag
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Short list of choices: 1. leave it and let it stay invested within the current plan 2. take a distribution and pay taxes on the amount you withdraw 3. roll it over to an IRA and don't pay taxes until you take money from the IRA 4. some combination of those

Just remember that the biggest decisions are the ones you take the time and energy to understand. I recommend talking to your current plan advisor, assuming he or she is a fiduciary to the plan, before you do anything.

Comment   |  Flag   |  Mar 05, 2015 from Austin, TX

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First, you may not HAVE to do anything. Most plans, are required to allow you to remain invested in the plan when you leave (assuming your balance exceeds $5,000), though there are plenty of reasons you may want to get your assets out of the plan.

If your plan is low cost, well diversified (probably using assets like Vanguard or DFA), and you do not need the funds now, you may wish to keep them invested where they are.

On the other hand, if your 401(k) uses variable annuities as investment vehicles, or if the choices are too vast for you to make good decisions on your investments, and especially if you will need to start taking from your assets to fund your current lifestyle, you can roll the account into an IRA where you have more control over the investments. I recommend that you find a fee only advisor, that will clearly state that they are a fiduciary. You are looking for someone that will work for you, thus be paid by you, not by commissions or sales fees on what they "sell" to you. The basis for every decision should be based on your needs and circumstances, and you should be very involved in determining the correct level of risk based on your ability, need and willingness to accept that risk. The investments should not be complicated, and you should be able to verify their values with Yahoo Finance or MSN Finance.

Once you have moved your assets into your own account, then you can have them distributed as you need, perhaps to fill the financial gap until you find another job, or maybe you are ready to retire and need a monthly check. A good advisor will help you determine how much you can safely take from the account and still be likely to meet your retirement goals.

It is a long process, but a good advisor will help make it easier. Good luck!

Comment   |  Flag   |  Mar 05, 2015 from El Paso, TX

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Luann,

I am sorry to hear you feel that way and had to part ways with your employer. Though you may not NEED to do anything, most advisors would recommend you look at rolling your 401k plan to an IRA. The benefit in doing this is that YOU are in control of your plan, investment choices, etc. not your ex-employer. With the help of an advisor, you should be able to create a solid investment plan for you, your money, and your future retirement needs.

Before you look at any particular products or recommendations from an advisor, I would recommend meeting/talking to one that you are comfortable with and who understands your specific needs and goals.

There are some excellent advisors on this site, but I always recommend you do your research first. If you have any questions/concerns about what to ask an advisor or how to research them, feel free to ask me directly and I'd be happy to point you in the right direction.

Nick

Comment   |  Flag   |  Mar 05, 2015

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First Sorry to hear about your Job. This can be a tumultuous experience. Even under the best of circumstances, making a career move requires a series of tough decisions, not the least of which is what to do with the funds in your old employer-sponsored retirement plan.

Some people choose to roll over these funds into an Individual Retirement Account, and for good reason. Just over 28% of all retirement assets in the U.S. are held in IRAs, and just under 50% of traditional IRA owners funded all or part of their IRAs with a rollover.¹,²

Generally, you have three choices when it comes to handling the money in a former employer’s retirement account.

First, you can cash out of the account. However, if you choose to cash out, you will be required to pay ordinary income tax on the balance plus a 10% early withdrawal penalty if you are under age 59½.

Second, you may be able to leave the funds in your old plan. But some plans have rules and restrictions regarding the money in the account. Or third, you can roll the money into an IRA. Why do so many people choose an IRA rollover? Here are a few of the major benefits: 1. An IRA rollover may open up your investment choices 2.Rollovers can make it easier to stay organized and maintain control. http://www.mundofs.com/resource-center/retirement/whats-so-great-about-a-rollover

Comment   |  Flag   |  Mar 05, 2015 from South Windsor, CT

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Great question! Here's the great thing: you have plenty of options! Since every situation is different, it's hard to give you advice without asking more questions... I suggest you get quality advice from a licensed professional working in the field. The professional should ask questions like: how much is in the account, when do you need it, what does your debt look like and talk about timelines for the next several years as well as your risk tolerance to the market. The number one concern I find with people your age is, "I don't want to outlive my money." This is a real problem, so you should make sure you're working with a professional that can show you how to make that happen. Any other questions...? Feel free to email me!

Comment   |  Flag   |  Mar 07, 2015

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