Hi, I am retiring next year and moving South

[Lapagibbb]

Trying to figure out how to manage rolling over a company 401k to an IRA about this time next year, knowing that I will have to cash out of the funds I'm invested in before that happens (to complete the roll over). I don't want to put the funds into a low-returning preservation fund now, but worry about the current interest rate situation with the bond holdings. What strategies for maximizing return and managing risk do you use? It is possible to leave the funds in place if something drastic happens in the market, but I am limited to an array of index funds to move money around in the 401K until cashing out. Suggestions? Thanks

 

[heeyy_joe]

You are going to have to take some risk in order to get a decent yield/return. Only you can decide what is too risky. Some here will do no more than cd's, investment grade bond funds or similar. Others accept more risk by mixing in some high yield bond funds or ETF's including preferred's. Maybe you should just stay in cash with this part of your portfolio - you could then buy low if the market drops sometime between now and when you have completed your move.

 

[gauss]

Trying to figure out how to manage rolling over a company 401k to an IRA about this time next year, knowing that I will have to cash out of the funds I'm invested in before that happens (to complete the roll over). I don't want to put the funds into a low-returning preservation fund now, but worry about the current interest rate situation with the bond holdings. What strategies for maximizing return and managing risk do you use? It is possible to leave the funds in place if something drastic happens in the market, but I am limited to an array of index funds to move money around in the 401K until cashing out. Suggestions? Thanks

Does you 401k plan allow partial rollovers to IRA or only a full rollover?

If paritial, you could move chunks of money over time, and thus spread risk over time.

-gauss

 

[pixelville]

Depending on your 401k provider and IRA provider, you might be able to do a rollover in-kind. Since you asked the question, I am guessing that is not an option. What I did was move Fidelity 401k to Fidelity IRA. And then, Fidelity IRA to Vanguard IRA. All the time staying in the market, in my desired asset allocation. You can also use investments in your non-401k assets, to minimize the risk and stay close to your allocation.