I know Usain Bolt holds the record in the 100 meter dash, but I can beat him to the finish line, IF I get a 5 second head start. Would you like to get a head start on retirement? We can do it with an In Service Rollover. Since 2008, an increasing number companies have allowed their employees to shift some of their 401k funds to a traditional IRA outside of the company plan. Why? A big reason was lawsuits. Millions of people had to postpone their retirement date when the markets crashed in 2008 and 2009. They had very few options outside of mutual funds that invested in the stock market. With potential lawsuits rising, many companies expanded the ability for their employees to move some funds after the age of 59 1/2. Since 401ks have replaced pensions for retirement planning, the need has grown for choices that allow retirees to have guaranteed income for them and their spouse. I am helping clients to move part of their 401k into a plan designed to provide and opportunity just like a pension. A plan that can position some funds as a source of lifetime income when they retire. What is amazing is how easy it can be. To start, we develop a plan based on a retirement budget. How much will we need to cover the basics like property taxes, utilities, cell phones, etc. The goal is to add another layer of guaranteed income in addition to the amount of Social Security each month. The plan has to consider rising cost in the future. Next we determine the amount of funds required to produce the necessary lifetime income each month. Many 401k plans make the next step easy. My clients and I will call the 401k together to find out what requirements they need to complete the In Service Rollover. Many of the plans will just ask the question, “Who do we make the check out to?” Some will have additional paperwork or require a spousal waiver form. I have clients that have positioned funds two or three years in advance of retirement so that they can start their income the day they retire. You may not be a world class sprinter, but you can get a head start on your retirement income plan.
- How much do I need every month in retirement to cover the necessary bills?
- Will my 401k plan allow me to complete an In service Rollover? (Give them a call)
- Does my advisor have the experience to help me develop the right income plan for retirement?