401k after retirement decision

D

Drwdre

New Member
I am retired 2 years now and my 401k is still with my former employer. I am planning to leave it for my children as I don’t need it. It is in an account that pays 4%, but also charges 1.3%. What would be the best thing to do with it? Leave it, move to an ira? Or any other suggestions. It’s pre tax so taxes would still be owed on it.
 

Drwdre said:
I am retired 2 years now and my 401k is still with my former employer. I am planning to leave it for my children as I don’t need it. It is in an account that pays 4%, but also charges 1.3%. What would be the best thing to do with it? Leave it, move to an ira? Or any other suggestions. It’s pre tax so taxes would still be owed on it.
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If this helps

My 401k was with Fidelity. Rather than draw on it @ 59 1/2 the Fidelity agent recommended converting to traditional & self directed IRA's That way those built & continues to build with no taxes until drawn on. I'm pretty sure Fidelity could help you transfer your 401k and set up something that meets what you want to accomplish.

I didn't like having to draw on my accounts due to the mandatory required distribution at age 70 1/2. But even so the build continues.
 
Drwdre said:
I am retired 2 years now and my 401k is still with my former employer. I am planning to leave it for my children as I don’t need it. It is in an account that pays 4%, but also charges 1.3%. What would be the best thing to do with it? Leave it, move to an ira? Or any other suggestions. It’s pre tax so taxes would still be owed on it.
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that’s crazy .

first of all if it’s money that is legacy money , why would you not have it in growth vehicles for them

and that fee is nuts , i would have pulled that over to a fidelity rollover day one
 

I would definitely move it to one of the big brokerage firms like Vanguard or Fidelity and invest it in some sort of mutual fund with growth potential.

You will have to take RMDs at some point.

I would also add the kids as beneficiaries so it bypasses your estate.

Familiarize yourself with the rules around inherited IRAs. I think they have to be liquidated in roughly 10% draws over 10 years following your death.

I would maintain control of it in case your situation changes and to prevent paying taxes on unnecessary draws.

Good luck, it’s a great problem to have.
 
Knight said:
If this helps

My 401k was with Fidelity. Rather than draw on it @ 59 1/2 the Fidelity agent recommended converting to traditional & self directed IRA's That way those built & continues to build with no taxes until drawn on. I'm pretty sure Fidelity could help you transfer your 401k and set up something that meets what you want to accomplish.

I didn't like having to draw on my accounts due to the mandatory required distribution at age 70 1/2. But even so the build continues.
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Agree with your Fidelity person. Is what I did; with Fidelity.
From what I understand, I don't have mandatory withdrawal until I turn 73.
 
mathjak107 said:
that’s crazy .

first of all if it’s money that is legacy money , why would you not have it in growth vehicles for them

and that fee is nuts , i would have pulled that over to a fidelity rollover day one
Click to expand...
Would fidelity have an adviser fee?
 
Consider in-plan Roth 401k conversions if they are offered within your plan.

That way you can pay the taxes bit by bit before you hit RMDs, since RMDs could end up costing you big-time on Medicare IRMAAs.
 

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