Joel Johnson on 401k rollovers and retirement planning

Summary:

Joel tells you everything you need to know about 401k rollovers and explains what it really means to specialize in retirement planning.

Main Questions Asked:

• What do we have to think about when it comes to retirement planning?
• How is tax planning different when you’re retired?
• How does long-term care factor into retirement plans?
• What are the financial implications of the death of a spouse?
• The sequence of returns risk, what does that mean?
• What are the main benefits of taking a 401k and turning it into an IRA?
• Once in an IRA, how do we know what to invest in?

Key Lessons Learned:

Retirement

• Timing when you take your social security is very important, most sources say to wait until you’re 70.
• If you have a large sum saved up, it may make sense to take social security benefits.
• Know the different nuances of social security and that blanket statements won’t be appropriate for everyone.
• You have more control over the amount and when you pay taxes when you’re retired.
• Tax planning can also affect your Medicare payments, it’s important to understand where you’re taking your income to avoid paying more than you should.
• Long term care like a nursing home is not covered by Medicare. You have to self-pay and have insurance in place to protect your assets.
• Housing and lifestyle will be an important decision to make once you retire, seek out a retirement specialist to help you make a good one.
• The death of a spouse can lead to paying higher taxes due to the change in the filing status. You have to plan ahead for the financial implications of the death of a spouse.
• If you get low rates of return on your retirement portfolio in the early years, you may never be able to recover. You have to sequence the order of the returns. Looking at the long-term market rates of return don’t tell the whole story and can lead to very different outcomes.

401k Rollovers

• The main benefit of rolling a 401k into an IRA is flexibility.
• You are not the client in a 401k, the company you work for is. This means your best financial interest may not be served.
• An IRA is tailored to your investment needs.
• It’s important to get personalized advice when it comes to your portfolio.
• If you do the rollover correctly into an IRA, there are no tax implications.
• The investment plan should be designed around your financial plan and your need for income.

Links To Resources Mentioned

Money Map Retirement Review 1-800-705-1232

Thank you for listening!