NOT touching 401K after retirement

[engineernerd]

One reason to spend down assets other than a 401(K) is that 401(K)s are more off-limits to creditors than other kinds of accounts. Federal law controls which assets are protected in bankruptcy and state law controls which assets are protected otherwise; in my state employer-sponsored retirement plans enjoy better protection than individual IRAs (unfair but true) and taxable accounts.


Since the hospital in which my husband had his appendix removed last month appears to have charged his health plan $93,000(!!!!!) for his 2 nights in one of their rooms and 1 hour in the operating room (the actual surgeon, the emergency room, and who knows what else were not included in that, BTW), the idea that medical debt could put a real dent in a multimillion retirement portfolio appears more possible than I would have believed. I mean, what would they have charged if he'd needed a complex several-hours-long surgery or a week or more in the hospital?


THANK GOD for the No Surprises Act (outlawing balance billing for emergency medical care)! If my husband had needed his appendix out a couple of years ago the hospital could have come after us for the difference between the $93,000 and the $36,000 the insurance company "allowed"! So now we should all educate ourselves about what counts as an emergency under this law so we can protect our nest eggs by going to urgent care instead of the hospital unless we're sure it will qualify :-( What a great country we live in. Grrrr.

 

[mickeyd]

Since we have Medicare/Tricare, our future medical expenses are mostly known to be close to zero. (Age 78/74). We have executed several Roth conversions, but hate to eat up so much cash on taxes. Our RMDs go to either TSM accounts (after tax) or TBM.

Keeping it simple for 78 years.

 

[engineernerd]

Since we have Medicare/Tricare, our future medical expenses are mostly known to be close to zero. (Age 78/74).

Yes, "we all" means just those of us too young for Medicare and at risk for balance billing.

Our RMDs go to either TSM accounts (after tax) or TBM.

TSM? TBM?

 

[maestro]

Several retired friends and colleagues that I know haven't touch their 401K for years after retirement. I just wonder if it's unusual and if anyone here is doing it.

I think some of us are over saved and end up not living or enjoying as much in their younger days. How much is enough? 2 millions?? 3 millions? Why?? so you died left over a big chunk of your wealth for your kids and son/daughter-in-laws?

Your thought?

enuff

Depends on your life style. Retired at 62 in 2018, and I haven't touched my 401k, rolled over to IRA. I live below my means, blessed with corporate pension that pays the bills, have had very little debt in my life, own my home, paid off way long ago with accelerated payments. Live the blessed life, and you will see abundance as I have.

 

[Al18]

I retired 4.5 years ago and have been withdrawing about 2.2% of the balance per year. Once we start collecting SS, we may withdraw less.

 

[Out-to-Lunch]

Y
TSM? TBM?

Total Stock Market and Total Bond Market.

 

[rodi]

Regardless of spending plan, it's usually a good idea to roll 401(k) accounts to an IRA when able due to the fees and lack of diverse investment options within a 401(k).

Best reason not to might be leaving a job at age 55 and needing to withdraw immediately.

This is pretty broad. Not all 401(k)s are the same.

As others have mentioned - sometimes 401(k)s offer a low expense, good interest rate stable value fund. Rarely found outside the 40x(b) plans... But, not all do.

My husband's 401(k)s had icky, high expense, managed funds... He contributed just enough for the match. (I wrote about it here https://www.early-retirement.org/forums/f28/wwyd-husbands-craptastic-401k-plan-63390.html )

Mine had super low expense (lower than vanguard) index funds and target age funds... I would have kept my money there except in the last corporate spinoff/selloff/merger/pick your corporate term (I went through 5 while working for the same company... ) they moved us to the new corporate overlord's 401(k) plan... higher expense costs on many of the funds. We were given the option to roll to a self directed IRA or to the new plan... I rolled to self directed IRA.

Not all 401(k)s are crappy. Some are very good. But some are crappy - exceptionally so (see the link above)

 

[Koolau]

This is pretty broad. Not all 401(k)s are the same.

As others have mentioned - sometimes 401(k)s offer a low expense, good interest rate stable value fund. Rarely found outside the 40x(b) plans... But, not all do.

My husband's 401(k)s had icky, high expense, managed funds... He contributed just enough for the match. (I wrote about it here https://www.early-retirement.org/forums/f28/wwyd-husbands-craptastic-401k-plan-63390.html )

Mine had super low expense (lower than vanguard) index funds and target age funds... I would have kept my money there except in the last corporate spinoff/selloff/merger/pick your corporate term (I went through 5 while working for the same company... ) they moved us to the new corporate overlord's 401(k) plan... higher expense costs on many of the funds. We were given the option to roll to a self directed IRA or to the new plan... I rolled to self directed IRA.

Not all 401(k)s are crappy. Some are very good. But some are crappy - exceptionally so (see the link above)

Yeah, mine is pretty flexible and has Stable Value Fund. Expense ratios are decent.

 

[Al18]

I don’t like the mandatory 20% Federal Tax withholding from a 401K. There is no mandatory withholding from an IRA, though your brokerage may encourage you to have 10% withheld.