Once you reach 70 1/2

Once you reach 70 1/2, your choices are further limited because you’re required to start minimum distributions from your IRAs and retirement plans (except for a plan run by an employer you still work for).

Investment decisions
What should you be invested in? You’ll probably want to be more conservative than before retirement. Yet that doesn’t necessarily mean abandoning stocks. With potentially 20 or more years in retirement, inflation can eat away at lower-returning assets. Even at a modest three percent annual rate, inflation could cut your standard of living in half in 24 years.

Planners may recommend that the portfolio hold at least two to three years of living expenses in cash and bonds that can see you through a stock market decline. Beyond that, there is no magic allocation of stocks/bonds/cash or other assets. Much depends on your other sources of income, risk tolerance, age, financial goals, such as leaving money to children, living expenses and so on.

Non-financial concerns
Besides adjusting your investments during retirement, you may need or want to adjust your lifestyle. Is retirement turning out as you envisioned? Did that “practice” you did just before retirement pay off?

As noted earlier, it’s common today for retirees to return to work—not out of financial necessity but for something stimulating to do. Playing golf every day or traveling all the time can get boring for some. Besides work, you may want to consider going back to school or doing volunteer work. Keeping mentally, physically and socially active is key to an enjoyable retirement, say experts.

It also can take some adjusting to be suddenly spending 24 hours a day with your spouse, particularly if you have different retirement desires.

Retirement Rollover (definition hover rollover) 1
A direct Rollover also allows your retirement money to continue to maintain its special tax treatment, a tax-deferral. Continue to build tax-deferred savings when you change jobs with a direct, trustee-to-trustee, and rollover.
Some of the advantages of doing a rollover when you leave your employer are:

1) Distressed companies may spell trouble.
Large and small companies fall on hard times. When they do, your pension funds may be in jeopardy. There have been cases where employees have lost money because they can’t get their pension funds due to a bankrupt or corrupt former employer. However, once your funds are rolled over, you won’t have to be concerned about what happens to your former employer.

2) Your previous employer may get bought out or merge with another company.
The rules governing your retirement plan are largely decided by your employer. These rules may very well change when a company is merged or sold. And who knows, these changes may work to your disadvantage. By rolling your funds over now, you won’t have to be concerned about what happens to your former employer.

3) You may qualify for a conversion to a Roth IRA, and if you do, it may be to your benefit.
Only the Roth IRA gives you tax-free earnings and tax-free withdrawals. After a five-year holding period and if you are 59-1/2 , you can take money out of a Roth-IRA without income tax or tax penalty if the Roth rules are followed.

4) Build a more diversified portfolio.
With your own IRA rollover account, you get to select the investment company and the investment choices you want.
Your previous employer’s pension plan may limit or not even allow participants to choose their investments. If the investment choices for your 401(k) plans or pension plan perform poorly, you will have less money for your retirement. That is not to say that your own investment choices will perform any better, but by rolling over your funds you will have more control on when, where and how your money is invested.

5) Your 401 (k) plan may have high expenses.
It is not easy to find out what it cost you to have your money in a 401(k) or similar employer sponsored retirement plan. When the funds are left with the plan sponsor, they may not be invested as you desire and there is an additional layer of administration to go through for the former plan participant. Your plan fees may be higher than your Rollover IRA fees. By rolling over your retirement funds you stay in control of these costs by choosing who administers and manages your funds.

6) Avoid losing track of your investments or your employer losing track of you.
Over the course of your career you may change jobs several times. You may move several times and your employer may also move to a new location. Some people lose track of their paperwork and forget that they had accumulated some pension money with one of their previous employers. And, if that employer loses track of your address it may be hard to track down your assets.
When you rollover your funds after you leave your employer, especially when you consolidate your funds into one rollover account, you reduce the risk of misplacing or losing track of your money.

7) Handle mandatory distributions wisely.
If you have less than $5,000, the plan can decide to send you a lump sum distribution. To avoid paying taxes and penalties on any premature distributions do a direct rollover of those funds and keep your retirement funds working for you.

8) Avoid the spousal consent rule.
If your retirement funds are left in a retirement plan and you marry, the consent of your spouse will be needed if you decide to name anyone other than your spouse as the beneficiary. You, on the other hand, may want your parents or someone else to receive that money. Executing a rollover when you are still single lets you keep the flexibility to name any beneficiary you want at any time without having to go to your spouse for consent.

9) Control the access to your funds.
Some plans do not allow a participant to withdraw only a portion of their funds. Also loans from the plan may no longer be available to you after you leave your employer. Thus, you may have to pay taxes and penalties on all of your retirement money even though you may only need part of it.
A rollover IRA gives you the flexibility to take out, if needed, a small part or all of your money. You may be subject to taxes and penalties but only on the amount you pull out. You may even take money out without penalty for qualified distributions such as education expenses, first-time homebuyer expenses (up to $10,000), medical expenses, death, and disability.

10) Reduce the tax burden on your beneficiaries.
Upon your death, your spouse has the option to withdraw your pension funds and roll them over to a tax-deferred IRA rollover account. Any other beneficiary would be required to pay taxes on any payout of your pension funds.
Some beneficiaries may not need these funds right away and would rather delay receiving a payout in order to avoid the income taxes and to take advantage of the continued tax-free buildup inside the plan. Your beneficiary may be stuck if the plan forces them to take the account balance.

11) Too much company stock may be risky.
Some companies have large portions of their employees’ profit sharing and 401(k) funds in their company stock. By taking your pension funds with you, you have more control on how your money is invested and your level of diversification.

12) You may lose the flexibility to borrow against your 401(k)
Most 401 k plans will suspend your privilege to take a loan from your 401(k) once you leave your employer. Gone also may be your ability to take a 401k hardship withdrawal. If you are self-employed you may be able to start a Solo-401(k) that will be under your control. Many Solo401(k) plans come with a loan feature that will allow you to keep the flexibility to take out a loan when you need.