Move Money once retired?

[beccazan]

Good morning, All! Not sure if this is the right board for this question, but let me know if it isn't.

Currently I am saving for retirement in a Roth IRA (VGSTX) and 401k (VEXAX). I am hoping that in 15-20 years I will be able to retire and will need to begin receiving an income from these funds (for 30 or so years hopefully). Will I need to move the funds into one fund (like VWINX or VPGDX)? Can the 401k funds be deposited into the IRA and take monthly payments from them?

I thought saving for retirement was the hard part but deciding the best way to distribute those funds during retirement seems to be a bit more difficult!

Thank you!

[verrip1]

Nov 9, 2017 10:54:09 GMT -5 beccazan said:

Good morning, All! Not sure if this is the right board for this question, but let me know if it isn't.

Currently I am saving for retirement in a Roth IRA (VGSTX) and 401k (VEXAX). I am hoping that in 15-20 years I will be able to retire and will need to begin receiving an income from these funds (for 30 or so years hopefully). Will I need to move the funds into one fund (like VWINX or VPGDX)? Can the 401k funds be deposited into the IRA and take monthly payments from them?

I thought saving for retirement was the hard part but deciding the best way to distribute those funds during retirement seems to be a bit more difficult!

Thank you!

Most questions like this are posted over at the Your Money board.  But I think I can handle this one. 

Unless your 401k is one of those infrequently-found Roth 401ks, you could not roll it over directly into a Roth IRA.  The Tax Man would severely frown on such a tax avoidance scheme.  Instead, a standard 401k would have to be rolled over into a Traditional IRA envelope. 

Once inside the Traditional IRA envelope you will have the ability to put the 401k money into one fund or as many funds as you prefer.  Consult your IRA Custodian for setting up monthly withdrawals when the time comes; it is easy.

Once the 401k money is in a Traditional IRA, you CAN recharacterize some or all of the money into your existing Roth IRA, but you would have to pay the taxes due on the amount recharacterized.  Whether this is a good idea is a matter of great debate.  Since there are more posters cruising the Your Money board, that would be a better place to get opinions on that subject.