Making Better Use of your 401K in Retirement

As a REALTOR® in Silicon Valley, I spend a lot of time talking about homes, market conditions, and how to grow wealth through real estate. But sometimes, wealth building isn’t just about what you buy—it’s also about how you protect what you already have.

That’s why I brought in Sue Christensen, Marketing Director with Global Financial Impact, to talk about a topic that’s not directly about real estate, but definitely tied to money: what to do with your old 401(k) or IRA. If you’re like Sue was, you probably have an old 401(k) (or maybe two) sitting with a former employer and haven’t touched it in years. And you might be thinking, “Well, it’s invested, it’s growing, no big deal.”

Turns out… that could be a very costly assumption.

The Problem With Old 401(k)s

Sue started her career in this space the same way many of us end up dealing with financial products: by being a client first. She had old 401(k)s, didn’t know what to do with them, and ended up leaving them untouched for 20+ years. That ended up costing her a huge amount of money, as the value of her 401K dropped while she hadn’t been paying attention. She’s now on a mission to help others avoid the same mistake.

Here’s the big takeaway: when you leave a 401(k) behind, you’re also leaving money on the table. You stop contributing. You continue to pay fees. And your money remains tied to the market, completely exposed to volatility. Not exactly what most of us want heading into retirement.

So What Can You Do Instead?

Let’s say you’ve got an old 401(k) or SE IRA and don’t want it just sitting there collecting dust (and fees). One of the best options Sue recommends is rolling it into a Fixed Index Annuity (FIA).

Now, before your eyes glaze over, here’s why this might be worth your attention:

Principal Protection: You can’t lose money due to market downturns. It’s literally illegal for insurance companies (who issue FIAs) to allow that.
Guaranteed Growth: FIAs offer the potential for indexed growth, without the risk.
Income for Life: Yep—you can set it up to pay you like a pension when you retire.
Probate Protection: It can pass to your beneficiaries smoothly, outside of probate.
No Fees: You don’t pay a fee to set one up. The insurance company pays the advisor.

That’s a pretty compelling list, especially for anyone looking for more control and less risk heading into retirement.

Why You Probably Haven’t Heard About FIAs

Here’s something I didn’t know until talking to Sue: most financial advisors can’t legally talk about Fixed Index Annuities unless they’re also licensed in insurance. Most advisors at big names like Schwab or Edward Jones are securities licensed, not insurance licensed. So even if they’ve heard of an FIA, they’re not equipped (or allowed) to explain how it works…and so they would rarely, if ever, recommend it.

That’s why you’ll hardly ever hear this strategy mentioned in traditional financial planning conversations.

FIA Fees and Commissions

Unlike traditional financial advisors who charge ongoing fees (1% per year, plus a fee every time you sit down with them), working with someone who helps you with an FIA is commission-based—paid by the insurance company, not by you.

So there’s no out-of-pocket cost to you. The advice, setup, and support? Complimentary.

Who Should Consider a 401(k) Rollover?

If you’ve changed jobs in the past decade and still have retirement accounts with your previous employer(s), it’s worth asking:

Are you still contributing to that account?
Do you know how much you’re paying in fees?
Are you comfortable with the amount of risk your money is exposed to?
Are you maximizing your retirement dollars—or just hoping for the best?

If any of those questions made you pause, it might be time to take action.

Real Estate and Retirement Go Hand-in-Hand

As someone who helps people buy and sell homes, I talk about equity all the time—how to build it, how to protect it, and how to leverage it when the time is right. Your retirement savings is another form of equity. And just like you wouldn’t leave your house unlocked and unattended for 20 years, you shouldn’t do that with your 401(k) either.

Whether you’re planning to retire here in Silicon Valley, downsize to Santa Cruz, or just want to make smarter money moves, rolling over your retirement accounts into a safer vehicle might be worth a conversation.

Want to Learn More?

If you’re curious about whether a 401(k) rollover into an FIA makes sense for you, I’m happy to connect you with someone who can help. Just reach out, and I’ll get you in touch with Sue or someone like her.

Because protecting your retirement dollars is just as important as growing them—and the sooner you do it, the better.