Things To Do With Your 401(k) When You Retire

Updated on April 4, 2023
Things To Do With Your 401(k) When You Retire

You’ve spent decades of your life working hard and saving for your retirement, and now the time has finally come! What can you do with your 401(k) now that you’ve retired and the funds are available for use? Take inspiration from this collection of ideas, and enjoy your retirement years with financial stability and ease.

Roll Funds Into an IRA

If you have multiple investment accounts, you may have some difficulty sifting through all that paperwork and keeping track of your funds. Consider consolidating your savings into a single IRA (Individual Retirement Account) to allow it to keep growing without taxes. Many IRAs offer diverse investment options that 401(k)s don’t, so you’ll have opportunities to make more passive income.

Start Taking Distributions

If you are over 59½ years old when you officially retire from your day job, you can keep your 401(k) with your former employer and begin receiving distributions. Those monthly payouts do count as income and will be taxed accordingly, but many retirees use that money to fund a life of leisure and relaxation in their golden years.

Fund a Small Business

Have you always wanted to go into business for yourself, but never had the time? Now that you’re retired, you have plenty of time—and financial resources—to get your revolutionary business idea off the ground. Rollovers for Business Startups, or ROBS, allow you to use your 401(k) to finance your business venture by rolling the funds into a new program in your business’s name.

Cash Out

Because of the significant tax penalties involved, financial experts view cashing out a 401(k) as a last resort. But if you’re experiencing financial troubles and need a big chunk of change, you can withdraw your 401(k) funds all at once for quick access to them.

Now that you’re retired, it’s time to decide what to do with your 401(k) retirement savings. Transfer those funds to a new investment account, fund an exciting new business venture, or start collecting regular distributions for financial stability in retirement.