44 year old looking for next Move

[SSMRI74]

Hello, For awhile now I’ve been a fan of these forums, trying to learn as much as I can.
Always had a dream of early retirement in some way shape or form. I kind of now look at retirement as being able to work and have days off on my terms. After reading so many other introductions I’m probably one of the smaller fish here, but I feel that if I play my cards right I can end up in pretty good shape.

So here my details, I’m 44 years old
My main chunk of retirement is in a 401k from my previous job..$380k in a American funds Target fund.
I’ve got a personal Roth IRA through Betterment that is around 28k...75/25 stock/Bond Mix.
My Current jobs 403B is around 10k in a Vangaurd index fund (Transamerica)
My main question is what to do with my previous 401k. I do have the option to stay in the plan as the funds are R6 as expenses are Low. Or should I roll it and my Betterment over to somewhere else?
Some other details I’m married with no kids. My spouse has about 150k in current 403b. We both out about 15% a year into our current plan.
I also continue to fund my personal Betterment IRA.

I do like the simple 3 index fund logic that I’ve found a few places on this forum, I’m just not sure if it’s something I can manage on my own or have to pay an advisor to do for me?

Please feel free to offer you advice, as I’ve wanted to do this for sometime.....constructive criticisms welcomed [emoji1360].

I’ve tried the Firecal i don’t have enough saved to make it work for me, but I’m still hopeful to have a rather good retirement. Right now my goal is to retire at 60.... Maybe sooner if I can. Please let me know if I’ve left anything out. Again any advice to help me along to try to achieve my goal would be great.... thanks in advance and please everyone keep posting... it truly is helpful.

 

[SSMRI74]

Sorry forgot Combined Yearly income for us is about 200k.

 

[bingybear]

someone will post the link to initial questions.. I don't typically link it.

If I caught all the assets, you have about 3 times you income in total savings?

How much do you spend per year?

How much do you expect to spend in retirement?

Make sure you use good number with Firecalc -- don't under estimate your needs.
A 401k may have better than creditor protection than an IRA depending upon your state. A self directed IRA can have better/more choices of investments if you pick a decent broker.

In my case I rolled 401ks to IRAs. I don't know enough about your situation/401k to make an educated guess.

 

[Dtail]

Welcome to our wonderful forum.
Some thoughts.
What would be your medical coverage plans before Medicare? On a related note, while no one knows if ACA will survive, it could be advantageous to build up some Taxable account balances to potentially manage income for ACA.
Does your 401k account contain a Stable Value fund and if so what is the current yield? This type of fund can be helpful after retirement, as it would not be available in a TIRA account.

 

[38Chevy454]

Welcome to the forum. You have many considerations as you listed. I would probably take the old 401k and put into a self-directed IRA. This will allow you many more investment options, and you can choose the allocation that works for you; along with watching fees to keep them low. Being 44 and these are long term funds, I would go heavy on equities, 80% range or more. FWIW, at your age I was 100% equities.


As for the total amount you have saved that you indicate will not be enough, the solution is save more. I am sure you can find some expenses to cut back, esp given that your combined income is fairly high. Once you max out the company match in pre-tax 403b, then increase pre-tax up to tax limits. After that if your plan allows, do after-tax 403b and then do back door Roth conversion. If not allowed to do after-tax, then take the money and do your own savings, with Roth being your choice You may want in future to have some general after tax funds to bridge any money needs if you can retire before 60, but deal with that later. I would go with any of the big 3 (Fidelity, Vanguard, Schwab), they can all do a good job and have low fee options.


The main goal with retirement savings is to maximize the good decisions and minimize the bad ones. You don't have to be perfect. Making better decisions now will have better future results. Nobody can predict the future, but being long term perspective on your funds I am a believer in the market as the best potential. Higher risk, but just keep investing and let it ride and compound. Don't panic and sell if market takes a dip, in fact you should view that as buying on sale. Better to buy low, right? Once you are closer to retirement, it becomes more imopiortant to avoid a large drop since you will not have as much recovery time. There is a lot of discussion on strategies, but for now concentrate on savings.


You do not need a finial advisor. You can do it yourself with some education and spending time. Remember that the financial advisor with your best interests is you.

 

[braumeister]

This list has helped many:
http://www.early-retirement.org/forums/f47/some-important-questions-to-answer-before-asking-can-i-retire-69999.html

 

[SSMRI74]

someone will post the link to initial questions.. I don't typically link it.

If I caught all the assets, you have about 3 times you income in total savings?

How much do you spend per year?

How much do you expect to spend in retirement?

Make sure you use good number with Firecalc -- don't under estimate your needs.
A 401k may have better than creditor protection than an IRA depending upon your state. A self directed IRA can have better/more choices of investments if you pick a decent broker.

In my case I rolled 401ks to IRAs. I don't know enough about your situation/401k to make an educated guess.

We had a few hiccups this past year spending and paying some bills off, but this year coming up we should be on the straight and narrow.... as far as retirement spending I always plug in 65% of my income. Seems to be close to the average. Thanks

 

[SSMRI74]

Welcome to our wonderful forum.
Some thoughts.
What would be your medical coverage plans before Medicare? On a related note, while no one knows if ACA will survive, it could be advantageous to build up some Taxable account balances to potentially manage income for ACA.
Does your 401k account contain a Stable Value fund and if so what is the current yield? This type of fund can be helpful after retirement, as it would not be available in a TIRA account.

Thanks for replying as of right now our healthcare is through my spouse who works for our state. I believe we are entitled to healthcare apon retirement, as long as you have 10 years in,so I have heard.

As far as a stable value fund, I do t think we have one.... there is a cash equivalents fund but not sure if that’s the same thing.

 

[WyomingLife]

Dear SSMRI74:

Welcome to the forum, and you are not a small fish. From the 10,000-foot level, you are in a good spot. First, you are here, which says a lot, at least from where I sit. And second, your total retirement savings exceed the median for Americans your age: https://www.synchronybank.com/blog/median-retirement-savings-by-age/. You also are young -- again, at least from my aging perch.

As a matter of personal preference, I've always rolled over prior 401k's into a more consolidated vehicle -- for us, that would be Vanguard, and for you, that would be Betterment. I did so for three reasons: (1) lower fees than with my prior employers' 401k's; (2) greater investment selection; and (3) a simplified financial life (yes, I am lazy, so it is just easier to go to one web site).

So, to evaluate a potential rollover, you may want to start by, with respect to Betterment and your 401k, comparing the fees and investment options. That analysis may help you make a more informed decision.

Once you get your financial picture set and merely observe your investments for awhile as the markets move up and down, you may get comfortable with managing your own money, thereby further reducing expenses and maybe even improving your financial posture. Over time, even smallish advisory fees crimp returns, at least for those who are willing to invest some time in gaining some personal finance knowledge. (This said, advisers certainly work well for many, and I have used them, too; YMMV.) Tools like PersonalCapital and others, I've found, arm the individual with great power in this respect.

You might also start tracking your expenditures if you are not already. Depending upon your expenses, with a combined income of $200k you may also find that you can start socking away even more money as you identify inefficiencies (if any) in your financial life.

Good luck and welcome aboard.

 

[Dtail]

Thanks for replying as of right now our healthcare is through my spouse who works for our state. I believe we are entitled to healthcare apon retirement, as long as you have 10 years in,so I have heard.

As far as a stable value fund, I do t think we have one.... there is a cash equivalents fund but not sure if that’s the same thing.View attachment 29690

Medical - I would firm up your thoughts on this one, so you can know there is one less potentially big expense.
Stable Value - not sure about the cash equivalents fund. Do you know the current yield?
I realize that many folks here might recommend rolling your 401k to effectively a TIRA upon retirement. However most folks don't have a high yielding Stable Value fund available, which can be a portion of your future Fixed Income allocation of your portfolio.
My SV fund is currently yielding 4.24% for effectively a risk free investment.

 

[SSMRI74]

Welcome to the forum. You have many considerations as you listed. I would probably take the old 401k and put into a self-directed IRA. This will allow you many more investment options, and you can choose the allocation that works for you; along with watching fees to keep them low. Being 44 and these are long term funds, I would go heavy on equities, 80% range or more. FWIW, at your age I was 100% equities.


As for the total amount you have saved that you indicate will not be enough, the solution is save more. I am sure you can find some expenses to cut back, esp given that your combined income is fairly high. Once you max out the company match in pre-tax 403b, then increase pre-tax up to tax limits. After that if your plan allows, do after-tax 403b and then do back door Roth conversion. If not allowed to do after-tax, then take the money and do your own savings, with Roth being your choice You may want in future to have some general after tax funds to bridge any money needs if you can retire before 60, but deal with that later. I would go with any of the big 3 (Fidelity, Vanguard, Schwab), they can all do a good job and have low fee options.


The main goal with retirement savings is to maximize the good decisions and minimize the bad ones. You don't have to be perfect. Making better decisions now will have better future results. Nobody can predict the future, but being long term perspective on your funds I am a believer in the market as the best potential. Higher risk, but just keep investing and let it ride and compound. Don't panic and sell if market takes a dip, in fact you should view that as buying on sale. Better to buy low, right? Once you are closer to retirement, it becomes more imopiortant to avoid a large drop since you will not have as much recovery time. There is a lot of discussion on strategies, but for now concentrate on savings.


You do not need a finial advisor. You can do it yourself with some education and spending time. Remember that the financial advisor with your best interests is you.

Thank you so much, really appreciate the advise.

 

[SSMRI74]

Medical - I would firm up your thoughts on this one, so you can know there is one less potentially big expense.

Stable Value - not sure about the cash equivalents fund. Do you know the current yield?

I realize that many folks here might recommend rolling your 401k to effectively a TIRA upon retirement. However most folks don't have a high yielding Stable Value fund available, which can be a portion of your future Fixed Income allocation of your portfolio.

My SV fund is currently yielding 4.24% for effectively a risk free investment.

Thank you so much, I will definitely look into a SV fund if available

 

[SSMRI74]

Dear SSMRI74:

Welcome to the forum, and you are not a small fish. From the 10,000-foot level, you are in a good spot. First, you are here, which says a lot, at least from where I sit. And second, your total retirement savings exceed the median for Americans your age: https://www.synchronybank.com/blog/median-retirement-savings-by-age/. You also are young -- again, at least from my aging perch.

As a matter of personal preference, I've always rolled over prior 401k's into a more consolidated vehicle -- for us, that would be Vanguard, and for you, that would be Betterment. I did so for three reasons: (1) lower fees than with my prior employers' 401k's; (2) greater investment selection; and (3) a simplified financial life (yes, I am lazy, so it is just easier to go to one web site).

So, to evaluate a potential rollover, you may want to start by, with respect to Betterment and your 401k, comparing the fees and investment options. That analysis may help you make a more informed decision.

Once you get your financial picture set and merely observe your investments for awhile as the markets move up and down, you may get comfortable with managing your own money, thereby further reducing expenses and maybe even improving your financial posture. Over time, even smallish advisory fees crimp returns, at least for those who are willing to invest some time in gaining some personal finance knowledge. (This said, advisers certainly work well for many, and I have used them, too; YMMV.) Tools like PersonalCapital and others, I've found, arm the individual with great power in this respect.

You might also start tracking your expenditures if you are not already. Depending upon your expenses, with a combined income of $200k you may also find that you can start socking away even more money as you identify inefficiencies (if any) in your financial life.

Good luck and welcome aboard.

Thanks for all the great advice.....learning a bunch today appreciate it

 

[SSMRI74]

Thanks to everyone for all the great advice... exactly what I was looking for.... I now have some work to do... I’ll definitely check in with progress. Hope everyone has a great weekend