Founder & CEO
Timothy Baker, CFP® is the founder and CEO of WealthShape, an independent advisory firm built on innovation, responsibility and the real world application of research.
He spent over a decade developing a new client investment experience to specifically address the major problems facing today's financial services industry.
Throughout his career he’s held positions as an advisor, consultant, portfolio manager, and vice president for institutional money management firms with billions of dollars in assets under management. These experiences led to a new way of thinking about personal finance based on a combination of three critical elements: digital age financial planning, low cost factor-based investment management and fiduciary advice delivered by CFP® professionals.
WealthShape works with clients in Connecticut and throughout the country to deliver evidence based investment solutions and high quality advice at a low cost. Clients receive access to all investments, goals and progress in one easy to understand, secure location. The company operates under the belief that financial planning shouldn’t be static but rather vibrant and ongoing all while upholding the highest level of fiduciary responsibility.
Tim’s appeared numerous times as a guest on SiriusXM Business Radio and frequently contributes to media outlets including Investopedia, The Wall Street Journal, Investment News, US News & World Report, Financial Advisor IQ and AdvisorHUB. He holds a MBA with a concentration in Finance, is a CERTIFIED FINANCIAL PLANNER™ professional and an active member of the National Association of Personal Financial Advisors (NAPFA). He guest lecturers on personal finance via electronic media and at various locations throughout the northeast U.S. including his home state of Connecticut where he resides with his wife Danielle and their daughter Ripley.
BS, Business Administration, Southern Connecticut State University
MBA, Southern Connecticut State University
WealthShape, LLC provides this communication as a matter of general information. No one should assume that any discussion or information contained in this material serves as a receipt of, or as a substitute for, personalized investment, tax or legal advice.
Advice and Investment Design Should Rely on Reason. Not Speculation.
Timothy Baker CFP® Advisor Insights
The answer is “it depends”. It sounds like these are both older employer retirement accounts, perhaps 401(k)’s or Cash Balance Pensions. At some stage of the game consolidation of multiple retirement accounts is often beneficial. There will be different considerations depending on the reason for needing to pull the money out whether it be for spending purposes or due to a required minimum distribution.
“The Investment Answer” by Goldie and Murray is a really short read that gives it to you in plain English. Not a bad place to start.
Indeed, it does. Contributions do not get left out when the calc is done for Social Security and Medicare taxes. Of course, it does reduce your ordinary income tax for federal and state purposes.
Since 1926 the average bear market has lasted 1.4 years for the S&P 500. If you are within 8 years of retirement, I would assume there is a portion of your 401(k) that is in fixed income. If it is all equity, your question demonstrates that it probably shouldn’t be. The equity to fixed income ratio of your portfolio will often define how much or how little you participate in stock market corrections. Markets historically deliver returns, but in order to achieve them, you have to be present for the good and bad.
We’ve gone through 5 different bull and bear markets since 1990. During that time the S&P 500 averaged over 9% per year. Not too bad considering the alternative would be timing when to get in and when to get out perfectly 10 different times.
That can certainly be the case but believe it or not, lots of employers have no idea what the fees are or how they are paid. The best thing to ask for would be the 408b2 fee disclosure document that addresses all fees associated with the record keeping, administration and advisory services. I often see these fees buried in the internal expenses of the funds themselves. Here is an article that I wrote a little while ago on the topic: Your 401(k) Decoded