At some point, you will want to take control of your retirement planning.
Chances are you do not have a pension coming when you retire.
This form of retirement income—although not extinct—is a thing of the past.
Instead, businesses use 401(k)s to help their employees prepare for retirement, according to a recent Kiplinger article titled “Why Wait Until You Retire to Take Control of Your 401(k)?”
They often include an employer match.
What does this mean?
If you contribute to your 401(k), your employer will match up to a certain predetermined point.
This makes 401(k)s great.
But they are not perfect.
There are often internal costs individuals pay on their accounts and also limited options for investment
When you are younger, risk is less of an issue.
You have time on your side.
What about when you are older?
When you are in your 50s and 60s, you are nearing retirement and negative hits to your investments are costly.
You will want to take a look at your money and begin eliminating risk.
In fact, if you are 59½ and still employed, you can roll over your 401(k) into an IRA.
This process is called an in-service rollover.
You will owe a few small fees.
Are there income limitations?
Anyone can do this.
Why specifically could it be a good idea?
You do have more control and more investment options.
This can allow you to create a plan to optimize your money in retirement.
Also, you could create a stretch or multi-generational IRA.
Why could this be good?
Your beneficiaries could receive payout over their life expectancies and decrease their tax burden.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Kiplinger (May 2017) “Why Wait Until You Retire to Take Control of Your 401(k)?”