When it’s time to leave a job you have more than the loss of income to think about in regard to your personal finances. You also need decide what you will do with the accumulated money in retirement plans at the company. That is a question that this reader has:
My wife will be retiring from a large company in another 4 years or so where she has done well. Her 401k retirement fund at the company is about $600K with an additional $300K in the company “matching” stock plan for a total fund of $900k.
My question is what steps do we need to take so that we don’t have to pay a fortune in taxes when she retires? Is it possible to transfer the retirement money into a stock plan without having to pay a large amount in taxes?
I know we have to pay taxes if we withdraw from the retirement fund for our personal use, but will we have to pay if we want to keep the money invested? I’m sorry this is such a basic question, but we’re not at all financially literate and are not sure what to do.
What would your recommendation be on what this couple does with their retirement funds and in what type of investments would you place them?