When someone changes jobs or decides to retire then it’s a good idea to review your retirement plan. Your situation and your goals will determine the best strategy for updating your plan.
There are several options, and really depends on what your situation is and what you are trying to accomplish with this money. As with anything, do some research and answer some important questions yourself prior to doing anything. There are many great resources available, one of the companies we work with, BlackRock has some great material for viewing.
5 Things that you should consider when changing your retirement plan:
- What does your Retirement or Financial Plan say to do with this money, and when was the last time this plan was reviewed?
A Retirement or Financial Plan can be a simple road map for the next 20-30 years of retirement detailing asset allocation, income & expenses or can be a complex document detailing Retirement, Education and future generations, estate tax issues & solutions and Risk Management. The important aspect regardless of how simple or complex is simply having a plan in place that you can use as a point of reference and to review on an ongoing basis and make changes as necessary.
- When is the last time you reviewed, and updated your Beneficiary information?
This might be one of the most common mistakes families make and can be rather complicated if it’s not reviewed on an ongoing basis. A beneficiary will be receiving this account, and it will be important that it reflects what your intentions are, that you & whoever will receive these assets understand any tax consequences. It will be important that if the intent is to pass down to the next generation that they are old enough and are prepared to manage investments. A trust could be of use, and most of the time coaching kids up on Wealth Management is always a good idea.
- What are your options with your prior company Retirement Plan?
Many plans will allow you keep the money in the “old” retirement plan for a period of time, but would rather the individual “roll” the money into a new company retirement plan or into an Individual IRA. There is benefits to all of the options, prior to rolling the money research or speak with a Professional Financial Advisor about all of your options for your specific situation.
- Do you have other Retirement plan investments, and how do investments fit in with the balance of your portfolio.
When reviewing your investments holistically, it provides greater context to your total financial life. This particular true when looking at your financial life when married couples might have multiple IRA’s or ROTH IRA’s in addition to prior company 401k or 403b along with stock portfolios and bank accounts.
- When do you need to start generating income?
Income generation regardless if you are between jobs or entering retirement is a critical area of discussion. Understanding your income options most often is best utilizing Financial Planning. Often clients have multiple sources of Income & Assets and when factoring in the various sources and matching up against your Expenses, Inflation and Longevity with intended estate planning making quick decisions on income is not optimal.
We hope you find this useful, and if we can be of any further assistance and provide you with some additional thoughts on this subject please feel free to reach out to us, we welcome the discussion.
Best, Craig Brown, CRPC ®