Rollover of husbands 401k

[ginny37]

I just rolled over 111k from my husbands 401k plan into a Vanguard traditional IRA and placed this in a Money Market account temporarily until we decide how we want to have this invested. I am still working and we don't anticipate tapping into this for a couple of years to purchase special items if needed. I am a bit paranoid on what funds to invest in as I don't want to risk his base funds in what I view a volatile market, but I would like to see him make at least 3-4% each year. I have been looking at some of the index funds, but not sure of when I should roll this over, in terms of timing. My husband told me to do what I wish with this account and I'd like to solicit your input on suggested stable funds that may return at least 3% or better annually.

 

[REWahoo]

I am still working and we don't anticipate tapping into this for a couple of years to purchase special items if needed. I am a bit paranoid on what funds to invest in as I don't want to risk his base funds in what I view a volatile market, but I would like to see him make at least 3-4% each year.

If you are concerned about volatility and think you may need these funds in a couple of years, then I'd suggest you'll be unhappy with anything more risky than a CD. Unfortunately there don't appear to be any two year CD's that come anywhere close to earning 3-4%.

 

[ginny37]

Thanks I may have to reassess the entire strategy as I prepare to retire by combining all assets at that point. I plan to retire before the end of 2014 and then combine the strategy of total investments and withdrawals. I was thinking I could get a head start with his
TI in advance of my retirement.

 

[Which Roger]

How was the money invested in the 401k? If you were OK with that asset allocation, you may want to consider similar funds in the rolled-over account.

 

[ginny37]

He retired on 12/31/12 and we moved it to a stable fund account until we decided to roll over to Vanguard last month. We had initially connected up with A FA and was going to consolidate all assets that we wanted to remain in investments (700k) after my retirement. After further research And considering cost impacts to my assets long term, I decided to terminate discussions with the FA. My investments are currently 70% stock and 30% bonds. Maybe I'll go back and take a look at how he had this invested prior to 12/31.

 

[LOL!]

The market is ALWAYS volatile. There is nothing special about this month or last month or any month. That's what gives it returns that are more than a CD. If there was no risk there would be no returns. That is, there has to be a positive chance of losing money in order to get 4%.

There are NO stable funds at Vanguard that return 3%. The only stable funds that Vanguard has return about 0.01%: The money market funds.

Occasionally, one can find CDs for 3% such as from PennFed or NavyFed.

Now, if you dropped the word "stable" and can accept some risk, some chance of losing money, then there are many more options available.

 

[Dash man]

when considering your risks, be sure to include the risk of inflation. It can eat you alive over time if you keep your money too "safe." That's why you need to keep some invested in equities. The portion you do keep in cash should be sufficient to help you ride out the fluctuations of the market if it goes down, allowing you to not have to sell at the wrong time. Personally, we keep five years of expenses in cash and the rest goes into diversified stocks or real estate rental properties.

 

[Dave J]

It's too late now, but did the 401K have a stable value fund? My SO is retired ATT and her 401K with Fidelity Stable Value that is still earning 2.6%.It was around 4% a few years ago. Were you required to roll it over?

 

[ginny37]

No it wasn't a requirement to rollover, but he needed to make a withdrawal and given the provisions of his plan, the option that he chose was to take a portion for his required distribution and roll the remaining portion to an TIRA with Vanguard. So now that we are with Vanguard, I'm looking to make the best of his assets for some level of growth. I'm new at this and doing everything possible to get myself educated on managing these funds. I understand that I've got to be willing to take some risks to make some money, but wasn't sure where to start other than low index funds.

 

[jazz4cash]

It's too late now, but did the 401K have a stable value fund? My SO is retired ATT and her 401K with Fidelity Stable Value that is still earning 2.6%.It was around 4% a few years ago. Were you required to roll it over?

+1
Sometimes it's best to leave the funds where they are. I must have the same SV fund from my former employer's 401k at Fidelity. As long as I have access to this fund, I will probably keep this 401k forever.