6 Replies Latest reply on Dec 6, 2010 2:13 PM by jkom51

    Investing

    danae

      I am 54 and have 5 years with NYS. Unfortunately my position has not been renewed.  I have about $55K in one account (Fidelity) 401 k and $35K in Tiacreff.  I do not know what to do.  One is the 403b and the other is the deceased spouse 401K moved to Fidelity Freedom Funds. 

      Any help is appreciated to be considered as a resource.

        • Re: Investing
          JerryD
          I consolidated a number of retirement accounts into an IRA and Roth at TIAA-CREF. Reasons were to reduce the absurd number of choices into a few pretty good ones, ease of management, web site and T-C has always had great customer focus and service.

          I ran into a similar situation when I lost a job of 15 years at a research lab at 49. You need to focus on getting another job(s) at close to the same pay or even better which I did for several years in between layoffs. While working, sink as much into your retirement as you can, even if it hurts. I did this even when the employer did not match just to get the tax sheltered funds. Even on short-term, lower paid jobs I put the maximum income into Roth's for me and my spouse. You have at least 8 years until you reach Social Security minimum age of 62. If you really push the savings you may add another $100k to the retirement fund plus the return you make on the current funds. Also I paid off the house since the rate was higher than the return I was getting. IMO you DON'T want house payments when your income goes down in retirement.

          Network, network, network! Looking for a job in  your 50's isn't fun but focus on the retirement plan you are creating and enjoy while you are doing it.
          • Re: Investing
            jkom51

            It is tempting to use retirement funds to keep going. DON'T DO IT!

            Using retirement account money will put you even further behind in your retirement. Should you get into financial difficulty, IRAs are protected from creditors. 401k, not always - so consolidate those two accounts as suggested. I personally prefer Vanguard or T. Rowe Price to Fidelity, but any of them are fine.

            The biggest mistake I ever made was using my 401k money to try to avoid filing for bankruptcy. We were fortunate to be able to recover from that situation. I should never have destroyed my retirement savings that way. I was never able to rebuild it again, despite working for another 18 years. Luckily things still worked out, but it was a huge blow. Many companies have stopped matching contributions and few offer pensions any longer.

            When you do find a job, you will be in the vulnerable position as 'new employee'. If things turn down again you have no seniority to protect you. So keep your retirement account intact, and avoid enriching the IRS by taking distributions too early. The tax hit is severe, so your net funds won't go as far as you think.