Advice for relative - Over 75 with 401K

Is there no option within the 401k for money market or something that will guarantee better than .05 to 1% return?

Thank you for the replies. I will check on those options.

What is their objective? Access to cash, growth of principle to pass on, increase performance? Are they living on the RMDs and want more?
As others have said dont just pull it all out in one year or there will be big tax consequences. Besides, if it isnt all used, what gets inherited can grow another 10 years tax differed so keeping it stashed in a 401k or IRA as long as possible is advantageous unless perhaps owner is in a lower bracket than those that will inherit it.

No offense, but if you're providing the advice and first instinct was withdraw it all and move to savings account, you shouldnt be offering any advice until you get informed. Seek a fee only fiduciary advisor that doesnt charge an assets under management fee. The relative did alright accruing $500k in 401k I'd guess they have at least a better clue what theyre doing than what you suggested right out the gate.

I think the first think someone that age needs to do is figure out what their yearly expenses are…How much does their SS pay and their over on any Medicare extra options and monthly meds and living expenses. As far as investing options, look at a good dividend ETF that will pay monthly/quarterly, so they don’t have to eat into their principal. A good ETF could add an extra 30-50 thousand a year without ever touching principal at that level, so they could still pass on a good nest egg ….

Spend it. Use a bond ladder for what is left.

Pull it all out, put half on black, then the other half on hookers and blow.

Had an older family member who eventually needed expensive assisted-living care.

The facility burned through well over $500K in a few years until he effectively had nothing and could qualify for Medicaid.

You might talk to a good estate planning attorney about any options to shield some of those funds.

It sucked to see a strong, independent person penniless in his last years.

quote:

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The facility burned through well over $500K in a few years until he effectively had nothing and could qualify for Medicaid.

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How long was he in assisted living facilities?

It was a good-quality assisted living facility, close to his home.

I recall they burned through well over $150K per year toward the end when care got complicated.

I understand the other poster's sentiment of "just strangle me with a pillow" but if your family members love you that ain't going to happen.

ETA: I recall that Medicaid looks carefully at any gifts to the applicant's family for several years, so this needs to be planned carefully with the attorney.

If you're unlucky enough to be in charge of the family member's finances, you can expect your greediest in-laws who feel entitled to a share of the inheritance to greatly complicate things - not exactly suggesting you suffocate the guy with a pillow but not far off.