250K in 401k at 70 years old

Submitted by Matt Be on Mon, 2012-12-10 21:58

Looking to do either and/or both of two things.

1. Pay as few taxes as possible
2. Make as much money as possible

I’m open to either one. But, if I invest this anywhere, it absolutely has to be basically zero risk, since I’m already in retirement right now.



Submitted by Alan - IRA critic on Fri, 2012-12-14 01:46

  • 1. Only the amount you must take out as an RMD is taxable. Your RMD will be less than 10k
  • 2.  Are you planning on rolling this over to an IRA? In either plan, you won’t get much of a return without taking on some risk. You should diversify your investments so that the riskier investments only comprise a small portion of the 250k

Submitted by John Jones on Fri, 2012-12-14 17:01

Your goal, at least with respect to taxes, should be to have as much after tax cash as possible over time, not necessarily to pay as few taxes as possible this year or next.  That is subtle, but you have to take into account your overall tax situation, investments, etc.  What is your marginal tax bracket in retirement (the top rate)?  If you are in, say, the 15% tax bracket with room to spare you might convert some of your 401k to a Roth 401k or Roth IRA each year in order to fill up the 15% tax bracket and get all future income tax free.  That also reduces your future RMDs and thus taxable income and gives you more flexibility in the future.

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