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What should I do with my 401(k) account after retirement?

Two years ago when I turned 59.5 years old, I rolled over a portion of my 401(k) to an IRA account. I recently retired and my remaining 401(k) account has gained favorably compared to my rollover account. I don't plan to tap in to either account yet until a year later. Should I leave my 401(k) account and roll it over later then? Or are there any better options to invest? It is valued at $220,000.

Financial Planning, Retirement, Investing, 401(k), IRAs
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March 2019

First, don't compare rates of return on the two accounts without examining how you are invested.  One may be more aggressive or conservative than the other, leading you to compare apples to sausages and coming up with the wrong reasons to favor the 401(k) over the IRA.

Having worked extensively with both types of accounts, I can tell you that most 401(k) products are built for growing and adding to a nest egg, but don't have the right features in place for withdrawing in retirement.  Some charge fees for extra checks being sent to you, and most of them do not let you specifiy specifcally which investments to sell when you withdraw.

IRAs, on the other hand, often have checkwriting directly from the account, allow for specific investment sells at withdrawal, can set up automatic RMD distributions when you turn 70.5, and are generally more convenient for withdrawing retirees.

You can keep both accounts, but I'm guessing you eventually will want to streamline your number of accounts.  In that case, you will probably end up rolling the 401(k) to the IRA.

March 2019
March 2019
March 2019
March 2019