What should I do with my 401(k) now that I’m retired?

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Q. I just retired at 72. What should I do with the $60,000 that I have in my 401(k)? Can I withdraw without penalties?
— Starting to plan

A. Congratulations on your retirement!

You have several options.

First being there would be no penalties for withdrawing the funds, should you need them, but you will pay ordinary income tax on the money, said Bill Connington of Connington Wealth Management in Paramus.

Also, you do not have to take Required Minimum Distributions (RMDs) this year because of the CARES Act, he said.

“You can leave your 401(k) where it is at if the plan allows you to do so or you can roll it over to an IRA,” he said. “The difference being that there will be more investment options for you to choose from in an IRA and your 401(k) may be limited in what options are available.”

Wherever you put the account, before you decide on how the funds should be invested, you should take a look at when you need the money, your risk tolerance and how the account fits in with the rest of your investments.

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This story was originally published Sept. 3, 2020.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.