401k to an IRA at 59.5 years old

[Harpy Eagle]

/----/ I trade covered calls in my IRA. My goal is to replace the Minimum Distribution that starts in 2025.

what is the end goal, to have as much left as possible when you die?

 

[Harpy Eagle]

i've contributed my max to 401k in indexed funds for 45 yrs...like a couple yrs after it began

That is awesome, you must have a millions in there.

I will admit I did not even know what a 401k was 45 years ago, hell we really did not start adding to ours much more than a decade ago.

 

[Harpy Eagle]

The rest of us though have to ensure we have a plan for financial stability going into retirement.

Yep

My wife and I have 6 revenue streams in retirement without our 401K. You and us are the exception.

We will have 5 without the 401k/IRA. But those 5 should be more than enough.

 

[Harpy Eagle]

age has never affected me at all in money regards

You are indeed blessed

 

[Hang on Sloopy]

That is awesome, you must have a millions in there.

I will admit I did not even know what a 401k was 45 years ago, hell we really did not start adding to ours much more than a decade ago.

the real key i think in investing, even a bit more than skill, is investing in your 20s......never too late, but what you gain in those 20 extra yrs is amazing

 

[Cellblock2429]

what is the end goal, to have as much left as possible when you die?

/——/ The end goal is to not out live my money. At 72, it’s not like I can go back to work except for minimum wage.

 

[Harpy Eagle]

the real key i think in investing, even a bit more than skill, is investing in your 20s......never too late, but what you gain in those 20 extra yrs is amazing

I can only imagine, and given what we have been able to do in the last 10 years I do wish we started sooner, but we have done our best to make up for it. It is also hard when you are struggling just to put food on the table to think about such things back then.

We have impressed it on our daughter and she has taken it heart started putting away for retirement at the grand old age of 26.

 

[Cellblock2429]

I can only imagine, and given what we have been able to do in the last 10 years I do wish we started sooner, but we have done our best to make up for it. It is also hard when you are struggling just to put food on the table to think about such things back then.

We have impressed it on our daughter and she has taken it heart started putting away for retirement at the grand old age of 26.

/——/ I set up custodial accounts for my five grandchildren the day they were born, so they will have a nest egg when the enter adulthood. They understand the money isn’t for a world wide cruise or a new car, but something to build on.

 

[Cellblock2429]

Why?

/——/ You can Google it and get a ton of hits. Here’s one:
Annuities are such terrible investments that the minute the government passed a law specifying that financial professionals had to act in their clients best interest, annuity sales fell off a cliff.

Why annuities are a bad idea for almost everyone

You’re betting the insurance company that you’re going to live longer than they think you will.

www.marketwatch.com

 

[Harpy Eagle]

/——/ I set up custodial accounts for my five grandchildren the day they were born, so they will have a nest egg when the enter adulthood. They understand the money isn’t for a world wide cruise or a new car, but something to build on.

no grand kids yet, not sure if we ever will, but that is another topic.

we plan to have money for our children when we pass and barring some unforeseen circumstance they will.

My wife got money from both her parents when they died and it really helped fill in a gap from so long of not doing anything to save for the future. It was not a ton of money, but it was helpful. We would like to have the same thing for them, though we are doing more now to make sure they have a solid foundation.

 

[odanny]

We do not have that option. We do have one we trust, he already has most of our non-401k investment money and has done a great job with it.

That's really important, and that is what kept me from moving my money, I don't have someone I trust to manage it.

I can handle it if I do something stupid and lose my money, but not sure I'd could handle someone else doing it. If he has a track record with you and you know you can trust him as a fiduciary, you should be good.

 

[Harpy Eagle]

/——/ The end goal is to not out live my money. At 72, it’s not like I can go back to work except for minimum wage.

That is a good goal, we are lucky in that as long as there is a US Govt we cannot outlive all of our money, and if there is not then none of the money will matter anyhow.

 

[Harpy Eagle]

That's really important, and that is what kept me from moving my money, I don't have someone I trust to manage it.

I can handle it if I do something stupid and lose my money, but not sure I'd could handle someone else doing it. If he has a track record with you and you know you can trust him as a fiduciary, you should be good.

The first planner we used was a friend from church and he never did anything wrong, in fact he never did anything at all. Once he made our initial investment he had not changed a damn thing. I was like "what am I paying you for?".

We pulled our money from him and used a good chunk of it for the earnest payment for our house we had built and then held on to the rest till we found one via my wife's co-workers that many of them used. After her mom died and we had more money than we wanted to deal with we went to him and could not be happier. Thus he will now get control of my 401k money as of tomorrow.

 

[odanny]

The first planner we used was a friend from church and he never did anything wrong, in fact he never did anything at all. Once he made our initial investment he had not changed a damn thing. I was like "what am I paying you for?".

We pulled our money from him and used a good chunk of it for the earnest payment for our house we had built and then held on to the rest till we found one via my wife's co-workers that many of them used. After her mom died and we had more money than we wanted to deal with we went to him and could not be happier. Thus he will now get control of my 401k money as of tomorrow.

Yea, I've wondered if you went with one of the big investment firms, like Charles Schwab or T. Rowe Price, if they guaranteed your investments from fraud, theft, or malfeasance on the part of the manager. They guy I talked to was young and seemed smart and honest, but the thought of me giving him my life savings was something I never seriously considered. I'm with Alight right now.

Transformation starts with your people

From hire to retire, and beyond, your people depend on you for resources that will enhance their health, wealth, and wellbeing. Put the power in their hands with data and technology that provides clarity through timely, broader connected insights. Drive better outcomes for your people and for...

www.alight.com

 

[Harpy Eagle]

Yea, I've wondered if you went with one of the big investment firms, like Charles Schwab or T. Rowe Price, if they guaranteed your investments from fraud, theft, or malfeasance on the part of the manager. They guy I talked to was young and seemed smart and honest, but the thought of me giving him my life savings was something I never seriously considered. I'm with Alight right now.

Transformation starts with your people

From hire to retire, and beyond, your people depend on you for resources that will enhance their health, wealth, and wellbeing. Put the power in their hands with data and technology that provides clarity through timely, broader connected insights. Drive better outcomes for your people and for...

www.alight.com

The first guy we were with was with a smaller company, our new guy is with Edward Jones. I probably would not have gone to him initially if not for so many of my wife's co-workers raving about what he has done for them. Nurses are a tight group and would not on purpose steer each other wrong. So far I am very glad we did

 

[Hang on Sloopy]

Good for you. No really, good on you.

If you have been max'ing out 401K contributions for 45 years you have nothing to worry about.

The rest of us though have to ensure we have a plan for financial stability going into retirement.

My wife and I have 6 revenue streams in retirement without our 401K. You and us are the exception.

WW

i've always tried to save 10% of gross to a 401k....10% to a roth.........and 10% for my drunken sailor speculative throw it in the shitter money....all in all i might have gained 2% in the shitter account....better in a savings account...lolol....but fun to do

 

[Hang on Sloopy]

Correct me if I'm wrong, but aren't RMD a divisor into the account balance at the end of the previous year?

That means as the years pass you have to take the balance and divide is by a smaller number. That causes the account balance to decrease over time.

Uncle Sugar want's his tax money.

WW

View attachment 889361

i got some yrs left before i'm forced to take it....throw it another indexed mutual fund when i have to

 

[Hang on Sloopy]

I'll send flowers?

[J/K]

This is why the determination is complex as a personal decision.

What is your heath, what is your expected health?

Do you come from a family with longer lives or did your parents/grandparents die from health issues at a younger age?

Are you single or married?

Are you the higher income earner or was your spouse the higher earner so that the SS Spouse Matching provision is in play?

What is your retirement financial situation? Do you need SS to pay the bills or can you afford to put it off.
.
.
.
An examination of these factors can help arrive at an determination of:

• Take SS early even though its a reduced amount,
• Wait until Full Retirement Age, or
• Delay SS for larger checks later.

WW

if your health is shit at 62 take it....if not, you might get hit by a bus or accident anytime, the chance of life

if you take your ssi at 62 and put it all in an indexed fund and not touch it for 5 yrs.....you'd have way more money while waiting to 67-70

 

[MarathonMike]

That's really important, and that is what kept me from moving my money, I don't have someone I trust to manage it.

I can handle it if I do something stupid and lose my money, but not sure I'd could handle someone else doing it. If he has a track record with you and you know you can trust him as a fiduciary, you should be good.

I agree and I've never had a money manager, other than my wife. I have a healthy (unhealthy?) distrust of doctors, money managers, contractors etc. I am a do it yourselfer to the max and that has worked out fine.

 

[MarathonMike]

I am now past the mythical 59.5 years old and can pull the money out of my employee 401k and put into an IRA with my personal investment broker with no penalties or fees other than the tad bit higher maintenance fee.

I cannot really see a downside doing this as the options with the 401k are so limited.

Has anyone else done this?

Anyone think of a good reason not to do so?

I talked to my money manager (the wife) and she has indeed begun transferring SOME of her 401k into a Roth IRA. We will owe ordinary tax on the amount transferred, but any earnings in the Roth will not be taxed.