Help with finance....

Ok, my dad just retired and he has to decide what to do with his 401k. He said that he would like to leave it where it is at and just let it collect interest but I dont think that either his workplace or the group that his 401k is through will let him do that. So we are going to talk to his bank next week about his options.

Well I was wondering what are his options and what kind of questions should we prepare to ask the bank, other than "Ok, what are his options?" I would like to have some kind of information so that he dont get taken for a ride...

Any help will be much appreciated, thanks...

it can be rolled over into a like account with no tax liability. Whatever he does he shouldn't take the payout. Taxes on that bad boy will kill it. Wait until it is needed in cash to cash it.

it can be rolled over into a like account with no tax liability. Whatever he does he shouldn't take the payout. Taxes on that bad boy will kill it. Wait until it is needed in cash to cash it.

Will he be able to roll it over through the bank or with the current 401k group? Like will the group have programs in place for such an event? Also, he is 61 now, how bad will it be hit when takes it out after his is 62? Is he always going to be looking at a bad tax hit on it?

Contact Liberty Mutual. I've been funding my own retirement for 5 years now and they offer alot of options including annuity funds, which I reccomend for tax purposes, and the fact that you can actually control where your money gets invested (sort of).

They offer a very comprehensive breakdown of all of the options and make them easy to understand.

Contact Liberty Mutual. I've been funding my own retirement for 5 years now and they offer alot of options including annuity funds, which I reccomend for tax purposes, and the fact that you can actually control where your money gets invested (sort of).

They offer a very comprehensive breakdown of all of the options and make them easy to understand.

My dad is getting his pension from a former employer where he worked for 26years, and he will be getting a pension from his current employer where he worked for 16 years. And then he will be getting social security next year. So I really dont think that he needs the money right away, and I am not sure what he wants to do with it. But I do know that whatever he does with it he will want it to be extreamly low risk, that is just how he rolls...

Typically you can park your money with the current 401k provider, you just can't contribute to it any more. If they won't let him do that then he should talk to a financial adviser about rolling over his funds to a less risky investments. BTW, he has to start withdrawing from his 401K by age 70 1/2. In any case, if he is of retirement age he shouldn't under any circumstance take risks with his money.

p.s. I have heard MassMutual is great at this sort of thing.

He should contact someone from Fidelity Investments or licensed financial planner. There are TONS of options and only a professional in that line can direct him to the right ones.

it can be rolled over as has been mentioned. does he have a roth ira set up? if not, that may be something to look into...

He can leave it parked as others have said but he will have no control over the fund or fund families. He needs to talk to several different financial reps. before making his decision. If he has a person that just wants to push annuities he needs to move on because they can have some heavy fees and cost that he may not need to pay plus they pay good comisions (thats what they make for selling them). This is money he needs for retiremnet so a mistake now could cost him thousands of dollars in the future. I took a class which was taught by financial reps from Mass. Mutual and was very impressed with them and he may want to give them a call. His insurance agent to see if they have a financial rep. as he should already have a working relationship with them.

His options are:

1) Let it sit right where it is until he's ready to use it. Pro: he doesn't have to worry about it now, and he can always move it whenever he's ready. Con: He can't change the investments within the 401K.

2) Roll it over into an IRA. This is the best option in my opinion. He can roll it over into the IRA and continue to let it just sit there if he wishes. Or he can make changes to the investments held within the IRA. Or he can even begin withdrawing funds to use (he needs to be at least 59 and a half years old to avoid costly penalties).

When talking to the bank, keep this in mind:

They're going to give him lots of great options, but all of those options will be with THAT bank. Just about all the options the bank presents will also be available through Fidelity, Vanguard, Liberty Mutual, and all kinds of other financial companies. My advice: talk to the bank and find out the options. But ultimately, roll the funds into an IRA with Fidelity or Vanguard. Their funds have the lowest expense ratios in the entire business.

I personally don't like investing in annuities, they do guarantee an income stream, but fees can be costly. And I like to manage my own investments. But if you're willing to pay the fees, an annuity and it's steady income stream can give peace of mind. To each his own. (if your Dad isn't ready to start using the cash yet, then DEFINITELY don't get an annuity until he's ready to start using the money).