Leaving a large employer with a 401(k)

After working through the rollover guide on our website and receiving their report, Mark and Linda book a 30-minute conversation and bring their questions. We learn about their spending, Linda's plans to keep teaching for a few more years, and what they want retirement to look like.

They plan to start drawing retirement income soon, so their capacity for risk is medium. Their tolerance is medium-low: the 2022 market drop made them uneasy. Their composure is medium. Our written proposal compares staying in Mark's 401(k) with rolling over (costs, investment choices, withdrawal rules, and protections), including when staying may be better. Because Mark is leaving work after 55, his plan may let him take withdrawals before 59½ without the 10% early-withdrawal penalty, which an IRA generally wouldn't. The proposal also includes a retirement plan tested across a wide range of market outcomes, and it explains how we're paid and discloses our conflicts of interest. With the trade-offs laid out, the decision is theirs. They choose to split it: they keep enough in the plan to cover withdrawals until Mark turns 59½ and roll the rest over to an IRA.

We set a mix to match their baseline and keep enough in steadier investments to cover their income needs in the first years of retirement. Withdrawals come from the 401(k) first, until Mark turns 59½, then from the IRA, with taxes in mind. We work with Linda on her workplace plan so their combined savings work as one portfolio. Their adaptive core responds to market conditions within set ranges.