At Enduring Wealth Advisors®, we’re focused on the long run!

Soon, you’re going to begin your life after Valero.

You may be wondering “What should I do about my account in the Thrift Plan, also known as a 401k plan?”

Does it need to be more conservative?

Should I go to cash?

How about selling all the employer’s company stock and diversifying into mutual funds?

Oh wow! What happens to the loan I took on my account?

These are all common questions we hear from Valero employees preparing for retirement. So, we’ve put together this video to help you understand our opinions on what to do with your 401k account before you begin your life after Valero.

Our clients tend to enjoy many years pursuing their own goals after leaving the refinery.

Which brings us to the first issue, should you make the portfolio more conservative, maybe even move all the investments out of the stock market and into bonds, or cash?

As with all investment decisions, each person’s situation is unique, but as a guiding principle, remember that this is simply a milestone along the continuum of your life. If you were comfortable with, say, a growth-oriented portfolio yesterday, and you’re comfortable with it today, the approaching milestone shouldn’t have a big influence on what we call “risk tolerance”.

Sure! Once you leave Valero, you’ll no longer be contributing to the retirement plan, but contributions during the final working years really have minimal impact. The bigger concern is how you plan to use the assets after your transition.

Do you need them more for your income, or do you plan to invest them for your kids’ inheritance? Do you plan to spend them during the go-go years, hedge against inflation during the slow-go years, or provide for your personal care during the no-go years?

Additionally, if you are in your late 50’s, there’s an opportunity to avoid a tax penalty by using the 401k plan as the bucket from which to withdraw funds until reaching age 59 ½. This strategy might tilt the scales towards a more conservative allocation.

Discussing these various goals with an Enduring Wealth Advisor® can help you determine if you should change the risk profile of your 401k account now.

Another common issue involves the Valero stock held in the 401k. A section of the Internal Revenue Code provides a tax-saving distribution strategy for these shares. We’ve prepared a free document titled “Guide to a Less-Taxing Life after Valero.” Request it from our website, if you or your co-workers own shares of Valero inside of the 401k plan.

Let’s ask Mark what does need the client’s attention before they “pull the plug.”

There might be two issues to resolve, requiring you to act.

First, if you don’t have enough money available in savings to bridge the transition from collecting paychecks to taking retirement plan distributions, which could take up to 90 days, the 401k plan might provide those funds through a loan or an in-service distribution before retirement.

Second, if you have established a self-directed sub-account, eliminate any securities that are no longer traded on the exchanges. The sub-account needs to be what the industry calls “in good order.”

And one last item.

If you have a loan against your 401k account, one way or another, it will get paid off. With careful planning, an Enduring Wealth Advisor can help you decide on an approach in pursuit of your goals.

Call us now at 866-916-9900 to begin the scheduling process to get you the advice you need to sort through these issues as you prepare for your Life After Valero!

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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