With less than 5 years to retirement, the goal becomes a secure retirement. You want to ensure that you have the assets that are needed to fund the lifestyle you desire after your working days are over. You will also need to start evaluating your distribution options in the near future. You will need to consider the amount of time the money needs to last, the amount of other income you will receive from other sources (from social security, other investments, etc.), and the amount of income taxes you will need to pay based on the size of your distributions and other current income. For help with some of these options, visit the Distribution Options page of our Knowledge Center, or consider speaking with a financial advisor for further assistance.
For most pre-retirees in this stage, moving your assets into a conservative profile will help offset any market downturns. The emphasis on safety of principal and relatively low volatility offered by a profile over-weighted towards fixed income will help protect your balance. This is especially important at this point in your career, as any capital reduction may substantially impact your retirement and require you to work longer than planned or to take a more aggressive investment profile than is appropriate.
If possible, contribute the maximum allowable by your plan or contribute at least the minimum level that results in a full company match. If your retirement is underfunded, you may be able to take advantage of catch up contributions.
Stay on Course
If your 401K account follows the market down 50%, which the market has done twice since 2000, the timing of your retirement or your quality of life funded by it will change. To help protect this from happening, 401K GPS will send you clear intra-quarter emergency signals to get you out of the market, on the sidelines and back on track when market conditions improve again.
Since you won’t have the time to make up for any significant market losses, 401K GPS will help ensure that your principal is protected. Of course there is no guarantee that our signals will be correct every time; however, we will make every effort to protect you in down market cycles. We recommend consulting with a tax or financial advisor to obtain appropriate advice regarding your comprehensive retirement, investment, and tax planning.