Why Retirees Should Leave Their 401(k) Alone
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What headlines set the scene before the 401(k) discussion?
With Your Money Briefing, I'm Tanya Bustos, reporting from the newsroom at The Wall Street Journal. Coming up, if you're a retiree, why you should leave your 401k alone. But first, here are some money headlines. France's business elite, including the country's two richest men, have pledged hundreds of millions of euros to restore Notre Dame Cathedral, kicking off what looks to be a flood of money from around the world. Bernard Arnault, a head executive at Louis Vuitton. plans to donate 200 million euros to the fund dedicated to restructuring Notre Dame. Francois-Henri Pinault, who controls rival fashion group Kering, says his family will donate 100 million euros. French officials are still assessing the damage.
It was unclear how much it would cost or how long the reconstruction would take. To check in on the world's biggest money manager for a moment, BlackRock this week posted a fallen first quarter profit as a price war ripples across the asset management world. The company posted quarterly profit of $1.05 billion. That's down from $1.09 a year ago. Revenue declined by 6.6% to $3.35 billion. BlackRock became a behemoth during the last decade with the rise of funds that replicate markets cheaply and are easily traded. But the journal says a substantial chunk of the firm's assets leaves BlackRock exposed to stock market swings and a price war in that part of the industry.
Why are retirees often told to roll over 401(k) balances into IRAs?
and a handful of digital health startups are offering consumers easy and affordable services that don't require the involvement of doctors or insurance companies. One company, EveryWell Inc., which sells at-home health testing kits, is the latest example. The company secured $50 million in Series B financing led by Goodwater Capital and Highland Capital Partners. Previously, the company had raised $5.3 million, including the $1 million secured when it was featured on the television show Shark Tank. Direct-to-consumer health startups continue to grow, with examples including sexual health companies HIMSS and Roman Health to online dental specialist CandidCo, Inc., which last week secured a $63 million Series B round of financing.
Straight ahead, the case for retirees to leave their 401ks alone.
New policies have encouraged retirees to let their 401k retirement accounts keep working for them, even in their post-career years. The Wall Street Journal's J.R. Whalen has more.
When it's time to retire, most people look to their 401 account as a source of cash to live comfortably in their post-career years. But is there a reason to leave your 401 alone and continue to let it grow? The answer is yes. And Wall Street Journal retirement reporter Anne Turgerson is here to explain. So Anne, in the past, people actually followed policies and methods encouraging them to transfer their 401 savings to retirement accounts. But times have changed.
right in the past it was really common well it still is very common for people to um when they when they leave a company to take their money whether they're retiring or whether they're just leaving a job at age you know 40 or 50 or whatever for them to take the money in their 401k plan and transfer it to an individual retirement account or an ira which is a tax-free transfer, and it's certainly a fine thing to do. A lot of people also cash out those accounts, which can be problematic, but doing an IRA rollover is something a lot of people just automatically do.
How is the Thrift Savings Plan changing rules that affect federal retirees?
And then the government is launching a thrift savings plan in September. Can you explain what that is?
So actually, the government has something called a Threat Savings Plan. It's a giant, massive retirement plan. It's basically, it's not a 401k, but it's just like a 401k for federal employees. And it's got like, I can't remember the numbers, but something like $500 billion in it. So It's a huge plan. So what's changing in September isn't that the plan is coming into existence because it's existed for years. What's changing in September is that the Thrift Savings Plan is making it easier for federal employees to leave their money in the plan rather than under old rules.
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Chapters
6 chapters
1
What headlines set the scene before the 401(k) discussion?
0:05–1:28
2
Why are retirees often told to roll over 401(k) balances into IRAs?
1:28–3:41
3
How is the Thrift Savings Plan changing rules that affect federal retirees?
3:41–5:44
4
What are the cost and fee comparisons between keeping a 401(k) and moving to an IRA?
5:44–7:10
5
How can retirees withdraw flexibly from 401(k) plans instead of cashing out?
7:10–7:42
6
What new plan features and advice options are encouraging retirees to leave 401(k)s alone?
7:42–7:51
Speakers
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