401K

[blockzilla]

ok now I'm freshly retired ... how do I get my 401K money without paying all those taxes ? or at least what do I do with it ?? I don't play the stock market , to volatile ... but I know I need to put it somewhere that I cam make something with it .. right now its only making 1.27 % in a "stable" situation

[Tfall]

Need to talk with an investment retirement advisor. I’m with Fidelity that has our 401k and Pension and it’s a free service. Maybe check with yours to see if they offer it. Some places will manage your money for a fee also. My elderly mother who we take care of has her money with Thrivent and a representative comes to our house to sit down with my mom and go over things. The fees were not all that bad for what she is getting.

We will be managing our own 401k because we are retiring at 55 and we can draw without penalty but you have to manage yourself. I have passive income stocks and ETFs that pay nice dividends. My Pension will be turned over to someone at Fidelity to manage or another firm like Edward jones to manage.

[CatFan]

If it’s a conventional 401K, you will pay taxes on it no matter what you do. You can delay SS so the hit isn’t so bad while your SS payments keep increasing.

Your investment choice depends on whether you need the money for living expenses or want it to possibly grow. 1.25% is probably about right for a safe investment. In stocks, you could lose half overnight and have to wait 6 or 8 years to recover.

[CatFan]

Need to talk with an investment retirement advisor. I’m with Fidelity that has our 401k and Pension and it’s a free service. Maybe check with yours to see if they offer it. Some places will manage your money for a fee also. My elderly mother who we take care of has her money with Thrivent and a representative comes to our house to sit down with my mom and go over things. The fees were not all that bad for what she is getting.

We will be managing our own 401k because we are retiring at 55 and we can draw without penalty but you have to manage yourself. I have passive income stocks and ETFs that pay nice dividends. My Pension will be turned over to someone at Fidelity to manage or another firm like Edward jones to manage.

Don’t even consider Edward Jones. They are very close to a straight up scam. Fees to invest. Fees to withdraw. Fees to close your account Fees to die. If they could charge you to park at their office they’d do it.

[Tfall]

Don’t even consider Edward Jones. They are very close to a straight up scam. Fees to invest. Fees to withdraw. Fees to close your account Fees to die. If they could charge you to park at their office they’d do it.

Thats a lot of fees.

We are meeting with them in April and will be looking at their fees. Everyone wants something to manage your money.

[CatFan]

Thats a lot of fees.

We are meeting with them in April and will be looking at their fees. Everyone wants something to manage your money.

Get a real broker. They are just not qualified to be trusted with money.

[zelmo]

Don’t even consider Edward Jones. They are very close to a straight up scam. Fees to invest. Fees to withdraw. Fees to close your account Fees to die. If they could charge you to park at their office they’d do it.

Even their offerings with no fees (bonds) have huge fees hidden in the spread.

[zelmo]

right now its only making 1.27 % in a "stable" situation

If you just want "safe" the settlement fund at Vanguard (VMFXX) is paying 4.54%. Just realize that nothing is without risk. The risk with this option is that the return is not locked in if rates decline.

[NitroZ7]

If you just want "safe" the settlement fund at Vanguard (VMFXX) is paying 4.54%. Just realize that nothing is without risk. The risk with this option is that the return is not locked in if rates decline.

That is the most overlooked part of cash. Rates have not been this high in years and we may not see them at these levels for a long time. I have been buying CDs and bonds with longer maturities in hopes of locking in the income stream. Everything maturing in the next few months will be rolled into 4-5 year maturities. I will keep the money in the money market to buy stocks if we see a bigger pullback.

[Charles Prestridge]

A few things to think about.

1. Only withdraw the amount you need, from your 401K. If you work with a another brokerage, you want to roll your current 401K funds to new brokerage. If you withdraw $50,000 this year, you will pay taxes on that amount. You do not want to withdraw 401k funds to invest with another brokerage. You want to roll over.

2. At 73 (assuming you are not 72 this year), you will be required to withdraw “Required Minimum Distributions” based on IRS tables. You will pay taxes on your RMD. You can reinvest any amount over your spending needs.

3. Each investor has to become comfortable with some amount of risk. You need to grow your 401K some, to help with inflation. Study Vanguard, Fidelity, and other low-cost funds.

4. If you have minimum income this year, you can investigate converting some of your 401K to a Roth. Pay taxes now, while income is lower, and let money grow tax-free.

Good luck.

[zelmo]

That is the most overlooked part of cash. Rates have not been this high in years and we may not see them at these levels for a long time.

Yes, that is true. Also overlooked is the bottom line goal. For me that is staying retired. I have enough saved that I won’t run out of money even if I have no return. That includes factoring in inflation. I will only get in trouble if I lose a bunch of it. Cash meets that goal.

The OP needs to make an honest assessment of his situation and determine his goals. Only then can the appropriate investment decisions be made. If he can’t do that on his own then seek out a true investment advisor.