Is there a way to Protect my Retirement Fund?

If you have funds in an IRA or 401(k), you have probably seen them decline recently. If you are currently retired, this is obviously cause for concern. If you still have 10 or 20 years of work until retirement, you have more flexibility. A lot of clients have called asking whether they should take their retirement funds out of stocks and mutual funds and put them in money market accounts. All options should be seriously considered in light of your short term and long term financial plans. There is no simple universal answer that is right for everyone. When reviewing your retirement plans, consider the following…

• If you decide to put your money in money markets, those at insured banks are FDIC insured…you might want to move them from the broker to the bank
• There are some good (and not so good, so be careful) annuity products that provide you a guaranteed rate of return and also guarantee your investment
• Consider paying off your home. The value may go up or down, but you will always need a place to live.
• If your retirement funds are limited, plan to work longer so you don’t need to dip into your reserves as soon. They will last longer this way. May be a good time for a 2nd (3rd, 4th ?) career.
• Run a series of “what – if” projections to help you plan for different retirement scenarios. Do this on an annual basis to keep track of how you are doing. We will help if you like.
• If you have a really bad financial year, consider rolling IRA funds into a Roth IRA to save future taxes. Taxes on your IRA/401(k) disbursements at retirement can be substantial. Check with your CPA before doing this to be sure it is a good move for you.
• Be sure you are well insured for health, home, accident, disability, life and related contingencies. There is nothing like an unexpected crisis to force you to dip into your retirement funds.