What is the Best Course of Action for Your 401k upon Retirement?

In this episode of Ready for Retirement, James discusses what you should do with your 401(k) when you retire. Questions Answered: What are the best ways to reduce fees in a 401(k)? Should you move your 401(k) elsewhere? How can your overall retirement strategy be improved? Timestamps: 00:00 - Introduction 1:45 - Listener Question 3:23 - 401(k) Hidden Fees 7:52 - Gaining More Control 9:45 - Investment Options 13:40 - Clunky Planning 17:03 - After-Tax Contributions 21:05 - Net Unrealized Appreciation 24:02 - Tax Treatment 26:08 - Age Importance 29:50 - Working With Us Learn the tips & strategies to get the most out of life with your money. Get started today → Subscribe to be notified for future videos: _ _ For more resources and content, check us out below! Website // Podcast // Instagram // Facebook // LinkedIn // Other videos we think you'll like: About Root: Worried about retirement? Start here: ...(read more)

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As you near retirement, it's important to consider what you should do with your 401k. This retirement plan is designed to help you save for your golden years through pretax contributions from your income. But determining how to use those funds after you've stopped working can be a challenge. Here are a few options to consider. Leave the Funds in Your 401k One option is to leave your money in your 401k. If you're happy with the investment choices offered by your employer's plan and don't need to withdraw the money right away, leaving it untouched may be the most straightforward option. You won't owe taxes on the funds until you start making withdrawals, and you can still make investment choices within the plan. Roll Over Your 401k to an Individual retirement account (IRA) Another option is to roll over your 401k into an individual retirement account or IRA, which can offer more investment options than your employer's 401k plan. With an IRA, you also have the flexibility to do a Roth conversion, where you can convert a traditional IRA to a Roth IRA and pay taxes on the funds upfront. This can be beneficial if you expect to be in a higher tax bracket when you start withdrawing funds. Take a Lump Sum Distribution You may also choose to take a lump-sum distribution of your 401k funds. This involves withdrawing the entire balance of your account and paying taxes on the full amount. While this option can give you control over your money, it also comes with significant tax implications. Withdrawals made before age 59 ½ may also come with a 10% penalty, unless an exception applies. Take Periodic Withdrawals A fourth option is to take periodic withdrawals from your 401k. You can choose to take required minimum distributions (RMDs) at age 72, or you can start taking periodic withdrawals earlier. However, it's important to note that taking withdrawals from your 401k will reduce the account balance and could affect your future retirement income. Ultimately, the best option for what to do with your 401k when you retire depends on your individual financial situation and your personal preferences. It's important to consider all the options and seek advice from a financial advisor to help you make an informed decision that aligns with your goals for retirement. https://inflationprotection.org/what-is-the-best-course-of-action-for-your-401k-upon-retirement/?feed_id=84309&_unique_id=642b755e7d079 #Inflation #Retirement #GoldIRA #Wealth #Investing #personalfinance #benefitsofinvesting #dividendinvesting #donoradvisedfund #financialeducation #FinancialPlanning #financialplanningat50 #financialplanningat60 #howdoIretire #individualretirementaccount #investing #ira #longterminvesting #prosandconsofinvesting #Retirement #retirementplanning #rothconversions #RothIRA #TaxPlanning #taxes #401k #personalfinance #benefitsofinvesting #dividendinvesting #donoradvisedfund #financialeducation #FinancialPlanning #financialplanningat50 #financialplanningat60 #howdoIretire #individualretirementaccount #investing #ira #longterminvesting #prosandconsofinvesting #Retirement #retirementplanning #rothconversions #RothIRA #TaxPlanning #taxes