Being Laid Off

O

OrangeBandit

Dryer sheet aficionado
Joined
Jan 21, 2019
Messages
26
Location
Tryon
Hello all! I stumbled across this site last week and boy am I impressed with all the knowledge and info. I can't stop reading on here.

Here is my scenario and I was hoping to get some good advice from all the "seasoned" investors/retirees. I'm 45 been with a mega corp for 20 years contributing to a 401k. I have no debt, house and all cars are paid for and we don't really live above our means, I would say we are frugal. When I get severed from the company I know I will have to roll the pension and 401k somewhere and that is one of my questions, where or what to do with it? I'm really inexperienced with all the investment strategies and seems like a lot to absorb. Oh, I wouldn't mind retiring in the near future if some of you think that would be possible with my paltry sum!!

Thanks, Bandit

$220k in 401k--Fidelity
$26k in Roth---Fidelity
$95k in pension
$77k in Quick Silver money market at credit union
$11k between checking and savings at credit union
 
OrangeBandit said:
Hello all! I stumbled across this site last week and boy am I impressed with all the knowledge and info. I can't stop reading on here.

Here is my scenario and I was hoping to get some good advice from all the "seasoned" investors/retirees. I'm 45 been with a mega corp for 20 years contributing to a 401k. I have no debt, house and all cars are paid for and we don't really live above our means, I would say we are frugal. When I get severed from the company I know I will have to roll the pension and 401k somewhere and that is one of my questions, where or what to do with it? I'm really inexperienced with all the investment strategies and seems like a lot to absorb. Oh, I wouldn't mind retiring in the near future if some of you think that would be possible with my paltry sum!!

Thanks, Bandit

$220k in 401k--Fidelity
$26k in Roth---Fidelity
$95k in pension
$77k in Quick Silver money market at credit union
$11k between checking and savings at credit union
Click to expand...
Don't forget to apply for unemployment and make sure to apply for Cobra before you leave. Since you are still employed get all your medical stuff including any surgeries taken care of while you are still on the payroll.
 
First question.
What is your spending?
 
OrgangeBandit posted "When I get severed from the company I know I will have to roll the pension and 401k somewhere and that is one of my questions, where or what to do with it?"

Fidelity will be able to help you with direct IRA rollovers with no 10% penalty. You may be able to leave the 401k balance where it is - it will depend on the wording in your company's Summary Plan Document.
 
SunBlueSky said:
OrgangeBandit posted "When I get severed from the company I know I will have to roll the pension and 401k somewhere and that is one of my questions, where or what to do with it?"

Fidelity will be able to help you with direct IRA rollovers with no 10% penalty. You may be able to leave the 401k balance where it is - it will depend on the wording in your company's Summary Plan Document.
Click to expand...

If one has a decent paying "Stable Value" account in their 401k, then it might be worth it to keep it and not roll it over as part of a Fixed Income allocation portion of your AA.
 
Dtail said:
If one has a decent paying "Stable Value" account in their 401k, then it might be worth it to keep it and not roll it over as part of a Fixed Income allocation portion of your AA.
Click to expand...

That is no reason to leave funds in a 401k, as you can easily buy stable value mutual funds in an IRA.
 
gwraigty said:
That is no reason to leave funds in a 401k, as you can easily buy stable value mutual funds in an IRA.
Click to expand...

What kind of GIC/Stable Value insurance wrapped products can one buy in an IRA?
 
Time is your ally, and you're still very young. Let's pray the equity market will quickly improve and that compounding of your investment is good to you.

You've done much to this point that is very good--no debts and keeping a frugal lifestyle (like many of us.)
 
gwraigty said:
That is no reason to leave funds in a 401k, as you can easily buy stable value mutual funds in an IRA.
Click to expand...

I don't think this is right.... though money market fund yields have crept up but are still typically significantly lower than stable value funds.
 
Welcome Bandit. Sadly, you don't have enough to retire at 45 unless you can live on $1k a month, but I suspect that you already knew that.

As others have mentioned, don't presume that you have to roll your pension or 401k into a IRA... you may not need to and it might be better not to but it is hard to know without more details.

While some of us here get a bit anal about investing, the reality is that with today's target date retirement fund you can do it with a single fund if you chose to... or probably a stock fund and a fixed income fund.

It's not rocket science and we are here to help and learn from each other.
 
Sadly, you don't have enough to retire at 45 unless you can live on $1k a month, but I suspect that you already knew that.
Click to expand...

+1
 
Unfortunately I know I will have to keep working but I think I'm DONE with the corporate BS. I can get by on $1000 per month and that includes all utilities, home & auto insurance, taxes and groceries. The only thing not figured in is healthcare and that is really why I need to keep working(in my eyes) which is sad. Well, maybe the occasional house or car repair bill. I can cut the cord on Satellite & Internet and probably save $150 per month.
I just want to put my money where it will continue to grow without having to constantly monitor it. My parents always told me to put my money in the 401k and just let it sit and there will be UPs and DOWNS but over time it will all average out. Do you think this is a correct statement about the ups and downs?


Thanks for all the advice so far. I will need to look into COBRA. I would like to get on the Obamacare bandwagon for a while!!
 
Dtail said:
What kind of GIC/Stable Value insurance wrapped products can one buy in an IRA?
Click to expand...

You did not specify that you were talking about an insurance product. I was interpreting "stable value" to mean an investment that maintains a $1.00 share price, like a money market mutual fund.
 
gwraigty said:
You did not specify that you were talking about an insurance product. I was interpreting "stable value" to mean an investment that maintains a $1.00 share price, like a money market mutual fund.
Click to expand...

Okay all good then.
 
OrangeBandit said:
Unfortunately I know I will have to keep working but I think I'm DONE with the corporate BS. I can get by on $1000 per month and that includes all utilities, home & auto insurance, taxes and groceries. The only thing not figured in is healthcare and that is really why I need to keep working(in my eyes) which is sad. Well, maybe the occasional house or car repair bill. I can cut the cord on Satellite & Internet and probably save $150 per month.
I just want to put my money where it will continue to grow without having to constantly monitor it. My parents always told me to put my money in the 401k and just let it sit and there will be UPs and DOWNS but over time it will all average out. Do you think this is a correct statement about the ups and downs?


Thanks for all the advice so far. I will need to look into COBRA. I would like to get on the Obamacare bandwagon for a while!!
Click to expand...
Great attitude. Listen to all opinions including the naysayers and prove them wrong!
 
Would it be a wise decision at this age in life to start putting more money into my Roth account?
 
OrangeBandit said:
What is considered a "low income" and how or why does that matter if I put if I put money in a ROTH? Just curious and trying to learn here!!!
Click to expand...
All of the contributions made to a ROTH can be withdrawn at any time, tax and penalty-free. Only capital gains on those contributions earn penalties if withdrawn early. Over the long term, ROTH tends to win in total value over tax-deferred accounts, but your current and future tax rates affect the outcome. Higher income folks tend to benefit more by investing in tax-deferred (401(k) or traditional IRA), as the contributions lower their current tax rate; once again, this is only a very general statement, and does precisely evaluate current and future tax rates; there are ROTH vs. IRA calculators you can use to determine which is best for you. Most of us here try to max out the tax-deferred contributions first (401(k)), then contribute to a ROTH if allowed.
 
Last edited:
OrangeBandit said:
Would it be a wise decision at this age in life to start putting more money into my Roth account?
Click to expand...

A Roth is ideal if your marginal tax rate today is the same or lower than what your expect your marginal rate to be in retirement.

OTOH, if you are in a high tax bracket today and expect to be in a lower tax bracket in retirement then tax-deferred is better.
 
Is your pension a lump sum? I cannot touch mine except as monthly payments following prescribed rules at certain ages even if I leave the company prior to retirement.
 
So you can take your pension as a lump sum but the question becomes should you! If your not a savy investor and have longevity in your family you may well be better off leaving your pension with mega Corp and receive monthly checks once your 65.

Just my 2 cents.
 
You must log in or register to reply here.

Similar threads

R
46 newly Divorced Single Dad.
Replies
15
Views
714
perez99
perez99
E
60 year old, in quest of a balanced discussion
Replies
24
Views
2K
Efun2024
E
O
Credit Union financial advisor ?
Replies
23
Views
876
mystang52
M
O
Retirement and 401K to IRA
2
Replies
44
Views
4K
Al18
A
N
59.5 And Sitting On The Fence
Replies
20
Views
1K
pacergal
P

Latest posts

Back
Top Bottom