[Rga20]

Now that I've finally retired what do I do with my 401k. Don't anticipate needing the money but don't want to lose it either. Appreciate your inputs.

[Dana1963]

Check with your plan administration last year mine changed from when you turn 70 + 6 months now mine is 72 + 6 months

[Bill14564]

My 401K provider allows me to keep the money with them and continue to manage it. I cannot make further contributions (I'm retired after all) but I don't need to move it.

You can also move it to another managed IRA, perhaps with a financial planner or investment adviser. Just be careful about how you move the money so it doesn't get taxed along the way.

[Stu from NYC]

Originally Posted by Rga20

Now that I've finally retired what do I do with my 401k. Don't anticipate needing the money but don't want to lose it either. Appreciate your inputs.

At some point you need to take out a portion each year and pay tax on it. They deferred it this year but probably will reinstate it in 2021

[retiredguy123]

Originally Posted by Dana1963

Check with your plan administration last year mine changed from when you turn 70 + 6 months now mine is 72 + 6 months

If you are referring to the new law that changed the required minimum distribution starting age, it changed from 70-1/2 years to 72 years, not 72-1/2 years.

[retiredguy123]

Originally Posted by Rga20

Now that I've finally retired what do I do with my 401k. Don't anticipate needing the money but don't want to lose it either. Appreciate your inputs.

I would suggest that you set up an IRA account with Vanguard or another low cost investment company. Then, do a direct transfer of all assets from the 401K account into the IRA, and maintain a similar asset allocation. I would not feel comfortable leaving my money in a 401K plan when an IRA allows me to totally control the assets and how they are invested. And, you will probably save money on the management fees. It was one of the first things I did when I retired.

[Cupcake57]

Originally Posted by Rga20

Now that I've finally retired what do I do with my 401k. Don't anticipate needing the money but don't want to lose it either. Appreciate your inputs.

Rollover into IRA at Vanguard-Vanguard Target Retirement 2020 VTWNX with expense ratio 0.13%; mine making almost 11% this year. Its balanced, so if there is a crash it won't be so painful.

[sail33or]

If the Stock Market crashes "EVERYTHING" crashes. In 2008 Crash, all Bonds, all stocks, all gold, all REIT's, everything crashed. In a crash diversity does not protect you. Just saying. Only Chickens have real value. I will let you figure out why.

[Rga20]

Thanks everyone. IRA conversion confirmed my thinking. Appreciate the input.

[Hape2Bhr]

Originally Posted by retiredguy123

If you are referring to the new law that changed the required minimum distribution starting age, it changed from 70-1/2 years to 72 years, not 72-1/2 years.

If you turn 72 after July 1, 2021...you can defer your first RMD until April 1, 2022. However, you must also take your second RMD before the end of the year 2022. This could possibly put you in a higher tax bracket because you've taken two distributions in one year.

[retiredguy123]

Originally Posted by Hape2Bhr

If you turn 72 after July 1, 2021...you can defer your first RMD until April 1, 2022. However, you must also take your second RMD before the end of the year 2022. This could possibly put you in a higher tax bracket because you've taken two distributions in one year.

Huh? The way I understand the rule, you must take the RMD in the year that you turn 72. So, if you turn 72 in 2021, you must take the RMD starting in 2021, and every year thereafter. It doesn't matter when you take it during year, it is taxable income for the 2021 tax year. The RMD was waived for 2020 because of COVID.

[JohnN]

Originally Posted by retiredguy123

I would suggest that you set up an IRA account with Vanguard or another low cost investment company. Then, do a direct transfer of all assets from the 401K account into the IRA, and maintain a similar asset allocation. I would not feel comfortable leaving my money in a 401K plan when an IRA allows me to totally control the assets and how they are invested. And, you will probably save money on the management fees. It was one of the first things I did when I retired.

I did the same thing, that's the way to go, convert it to an IRA. Eventually you will need to make withdrawals, when you do , if you don't need the $$$, put it into a Roth IRA. That way you can keep it invested and it's tax-free from that point on - after you pay taxes on the amount you convert of course.

[retiredguy123]

Originally Posted by JohnN

I did the same thing, that's the way to go, convert it to an IRA. Eventually you will need to make withdrawals, when you do , if you don't need the $$$, put it into a Roth IRA. That way you can keep it invested and it's tax-free from that point on - after you pay taxes on the amount you convert of course.

Normally, you can do a ROTH conversion with Traditional IRA money. But, if it is an RMD withdrawal, you can't put that money into a ROTH IRA.

[Ironnan]

I highly recommend the Ric Edelman book “The Truth About Retirement Plans”. I am in multiple groups, attend all sorts of seminars and this book has been the most comprehensive source to educate me. I did something right retiring at 59.

[villageuser]

You can keep your funds in your 401K or roll-over to an IRA or a Roth IRA. Do check out the philosophy of whatever company you decide to go with, and what amenities they offer. I went with T Rowe Price because I loved their philosophy in that we are there for the long-haul, and not for short-term trading, their funds have always done me well, they do offer a good mixture of funds from other companies, and they offer amenities, such as providing me with a financial advisor, at no charge, to help me decide how to balance my portfolio for my needs and risk comfort. I have actually only taken advantage of that option one time in the last twelve years but it is nice to know they are there for me.