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Jul 14, 2022

Today, we’re opening up the mailbag and answering some retirement questions we get from our listeners and clients.

George says he has all of his retirement savings in one IRA. Should he move some of that money elsewhere to be diversified?

Since we don’t know how close George is to retirement and what his risk tolerance is we can’t give him a definite answer. Instead, what should he look at to determine the right move for him?

You want to look at whether the IRA you are invested in is all in one stock or has some diversification inside the account. Do you have only one or two mutual funds? What is the size of the IRA? A smaller IRA has different diversification needs than a larger IRA. It is possible to be diversified within an IRA instead of rolling that money into a different account.

Mark feels like he needs to reduce the risk in his portfolio, but he doesn’t know where to turn. He’s looked at bonds, annuities, and even cash. But all of these options have drawbacks he doesn’t like.

Unfortunately, there is no perfect financial instrument out there. We have to analyze each tool and what the benefits and drawbacks are. You know when bonds will mature and bonds mature at the cost of their core value. Cash is difficult because there is a low-interest rate on this type of savings. But having emergency funds is essential. Lastly, annuities can offer some protection but there is probably a certain amount of time that you have to keep hold of the annuity. Always ask yourself what the pro, the con, and the string attached is.

Doug says he doesn’t like the options in his 401(k), but his company says he is not eligible to roll his money into an outside account. He knows people have moved money out of their 401(k), how does this work?

The Federal government doesn’t have a rule against rolling over your 401(k) into an IRA, but it’s up to your company’s HR. Individual companies have their own rules and policies. Most of the time people are eligible to roll over their own contributions to an IRA once they are 59 ½. This doesn’t necessarily apply to the employer match. If you’re leaving the job, at that point you can roll over your money into a new account or into a new employment account.

Check out the full episode or use the timestamps below to hear a specific segment.

2:00 – Growing grapes!

3:13 – Should I move some of my money to be diversified?

8:07 – I want to reduce my risk, what should I do?

16:02 – How do I roll over the money in my 401(k)?


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