Life Cycle Planning – Job Loss

Question: I am 47 years old and I have just lost my job. What should I do with my 401K and how should I invest it in this market?

Answer: Thank you for your question. I am sorry to hear about your job loss.

Probably to smartest option for your 401K in order to preserve this valuable retirement asset would be to transfer the funds into an Individual Retirement Account (IRA). Find an institution that offers IRAs (i.e. discount broker, your bank, etc.) and request a direct transfer. This way the 401K funds will be transferred directly to your IRA, eliminating any temptation to spend it. Most IRAs offer a wide constellation of investment choices, allowing you the opportunity to build a well-diversified portfolio. Make sure to consult with an investment advisor to help you allocate the funds within your IRA according to your time horizon.