"I don't want to work until my dying day — how do I make a plan?" DM Mail Bag

THE BIG THING I WANT YOU TO KNOW:

No matter how much you love your job, at some point, we all want to escape the professional grind and retire. Before you can do that, you need to make a plan and work towards it. This is the DM Mail Bag.

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you write, we respond

Responding to your most pressing questions from our mail bag is one of my greatest rewards.

Nothing question’s too simple or off-limits or off-topic, so let’s tee up the questions.

 
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#1 - john asked us through the website:

“I’m 62-years-old and I plan to retire in 10 to 12 years. Most of my retirement savings is in my 401k. I recently moved it from the target 2025 retirement fund to the 2020 fund for at least the next three months. Should I move all my money into a money market fund?”

To address any confusion, the type of funds John’s referring to are funds that automatically adjust the aggression of your investments based on the year you anticipate reaching retirement. It’s now 2019, so moving his money to the 2020 fund is a very conservative fund. He wants to know if he should move it into a money market fund.

I don’t think you’ve gone through a proper risk analysis, and I encourage you to figure it out. To really know how much risk to take is to understand two things:

1 - How much risk can you handle? (Even this question signals to me that you feel very nervous.)

2 - How much risk can your plan handle?

I don’t love the idea of selling everything and going to a money market fund. It’s kind of like selling everything you own in a garage sale. No, I don’t think you should move everything into a money market fund. What I think you should do is figure out the risk you can actually handle and stick with through your retirement, even when the market is dropping.

#2 Kelly emailed us using the contact form:

“My husband has a 401k from an old job that we need to roll over into something. We need to get a plan together for the future because I don’t want to work until my dying day. What should we do?”

I hear you! Working until death isn’t the best scenario nor does it sound very appealing.

Rolling an old 401k into an IRA is a very easy thing to do. But before I give you my advice, I’d need to know where you guys are on the road of life (i.e. your ages, properties you own, how much you have saved and nailing down your dreams for the future). Once I have all of that information, you can create a plan to get you and your husband off of the hamster wheel of working and working without a true direction or measure of success.

I’d start by getting all your data in front of you and defining your goals so you know the path towards realistically achieving your dreams.

You got this, Kelly! Sounds like you’re already thinking long-term and wanting to trust a strategy more than your gut! That’s key to your success.


Want to ask Dynamic money your question?

Do it! We would love to help. We get tons of these every week and feature a couple on the show and the blog.

 

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