K. Khun, Kenny Loggins, IRA discussed on Retirement 360
I remember. They ask Kenny Loggins the same thing that Loggins and Messina did a song called Viva La And they all wondered what's for he villa. What does that mean? Some deep Indian thing or something? They guess Now it's just a word I made up that they did something around. Yeah. What rhymes with evil? Oh, my God. Okay. Alright. So we've been talking about how this pandemic has affected your retirement, and I think it's really very important. You may think Okay, I'm back. Yea, I lost all this money in February March, And now my account is back to where it was. It's been dipping around in the last couple of weeks, but I'm back so it hasn't affected me. Well, you know what? What, if taxes in the future Because of the pandemic affect you? Another thing is a job loss. And now you've got another job and you're starting up again. What about that old fora? One k. So Allen? One of the options for people that they can let it sit there, or they conduce something with it? What are what are your recommendations? As you said, we went down in that valley and we've come back up. And I was sitting over the last few weeks. Spokes. We've kind of dodged the bullet we've got to do over here. So if if all of that volatility made you nervous now's the time to go back in and make some changes to the allocation that you have in your For one day in your IRA and your investments, whatever they are you need to now you have the time to kind of redo the risk. Reassess the The level of risk that you're taking and fix it, You know, fix it now, as opposed to wait until we go down in the valley again, But I mean back to the 401 K question. I mean, there's The thing that you have to do, and I've never understood this people have come in before. They've been retired for five or six years, and I still get their 401 K at the old for one old company that he worked with her, Or maybe there. They haven't retired there, working at a different job and Three jobs before. Therefore, Okay, still setting with that other company? To me that's like going on vacation and having a good time. And then when you leave the hotel, you just leave your luggage in the hotel and say, Well, if I ever go back, that hotel gets closer, you know? I mean, it just doesn't work. I mean, it's something that you should take with you. That company can change the 401 K plan in an instant, and then you have to make your forced to make decisions on that that you don't really have any knowledge about anymore. And it's probably not to be quite honest, probably doesn't really fit into your overall plan that investment style, But here's your choices. I mean, you could take the money out of the 401 K. Khun receive a check. And as long as you deposited into a new employer's 401 K or into your IRA account within a 60 day period of receiving it, actually, 60 day period of them writing the check to you. Then you know there's no taxes or anything. Otherwise, If you do that, you're going to pay taxes on probably the full amount unless you got some raw money built in there and then you're also if you're underage 59 half you're more likely going to pay a 10 per cent tax penalty on that early distribution, So it's critical to make sure that you're rolling it over from the boat for one K into the either the new fora one K. Poured into an IRA account. So let's look at those two decisions. So if you roll it into the new 401 K That may not be a bad thing. If you're new for one K plan has better investment options lower cost. Maybe they have a manager that's actually helping you manage the accounts or something like that. So that you don't know what your choices to make. They can help you. Manage that. Ah. Or maybe it's not. Maybe it's not any better. Maybe you've got you know, worse election are worse choices in this new forward keeping your head in the open. Then you would probably want to go to an individual retirement account or IRA account. So the IRA account usually if you goto somewhere, like Fidelity or TD Ameritrade or Charles Schwab or something like that. You can open up an IRA account. You can roll it into that. And then you have the world of investment's out there that you, Khun manage yourself. In a lot of times, those companies will help you manage him or somebody like us will help you actively. Mange. Of course, we're going to charge a fee. They're going to charge a fee. You know, toe help You manage that account, But then you've got somebody with expertise. It's knows what you're playing is or hopefully, they've helped you develop that plan. Oh, and will Manage those investments based on your tolerance for risk based on your goals, what you're trying to accomplish to get you to that in spot. That's what we're trying to do is really gets you to that retirement spot. Now what we try to do here in our office is we try to get you to the retirement spot, but also through that all the weight age 95 or age 100 to make sure you don't run out of money. A lot of the you know, investment advisors that are out there are just focused on helping you manage the account, maybe get the best return or have the least amount of risk or whatever your goal is with him. A lot of times they don't take into consideration the other things that we talked about the last segment. The goals that you have for retirement, had a really make sure that you got enough income to go through retirement. But That's really your your options on the 401 K. I think that one option really should be taken off the table is leaving it at the old For one. I could probably count on one hand with Three fingers left over the reasons why you want to do that, But really, you don't want to do that. You want to roll that over. Keep it in your control. Whether it's at the new 401 K company. Or in an individual retirement account that you control yourself. Something you talked about in the past two and this is if you get to the age of 59 a half if you have a 401 K in you're participating in it right now. And you are. You're maybe you're getting a match from your employer. And you're feeling pretty good about that. But you want to have control of this money and you don't like the you know the seven options that you have there. You have spoken in the past about something called an in service roll over. Talk about that a little bit. Yeah, The in service roll over is just announce. Every plan's different. So your plan may or may not include this, But for the most part, most most plans will allow you while you're still working. To take money out of your 401 K and roll it over to an IRA account that you can control now. The reason you might do that is let's say in the 401 k you've got Seven different investment options, and you're not real crazy about any of them. And there's just It's just not broad enough for you to do what you want to do. But maybe they'll allow you to take it out. While you're still working, maybe even under age 59 a half and roll it into an IRA account. Where you can control that. Now. The only way to find that out is really to contact the administrator of the plan. Ask him some questions. We're happy to jump on the phone with you and help you ask those questions, and we can help you determine within a matter of five or 10 minutes..