Last edited Mon Sep 26, 2022, 02:05 AM - Edit history (1)
Here’s my take;
I’m 56 under a defined union pension plan yet the company is now offering a 401k on top of defined pension so can I open up a Roth IRA and 401k separately.
Yes, you absolutely can. Some firms even offer a Roth 401(k), so it may behoove you to ask if their custodial firm offers one that you can participate in. It’s not common to have both available from what I understand, but it’s possible.
What I’m thinking is the match is free money
It most definitely is free money!
I think they said 5% and if I can dump in I figured $200 week in Roth and 401k combined
You may want to consider placing the bulk of that $200 in the 401(K), primarily because you have a higher contribution limit in that account than you do in the Roth - in your case because of your age, you can put up to $30,000 per year in the 401(k). The IRS announced new contribution limits to retirement plans (IRA’s), and those details can be found
here.
and if so do you think treasury notes say ten year maturity is good idea.
Bonds are typically a conservative (as opposed to aggressive) asset class, and US Treasury Securities are about as conservative as you can get. The Ten Year is considered the benchmark, risk-free security worldwide and is currently offering a Coupon of 1.88% and the current quote on Bloomberg is showing the yield at 2.92%, which means the bonds are selling for a discount to Par at 91 1/32, which means they cost ninety one and one thirty second percent of par, or $1000. So a $1000 face value bond will cost you just over $910 and after ten years (provided you bought one recently issued) it will be redeemed for $1000, and you will have received $18.80
per year in interest payments.
How much of an individuals overall retirement account(s) is invested in bonds and how much in equities and other asset classes depends on several factors, the primary one in my opinion is your tolerance for risk. If you absolutely can not stand the idea that your account might go DOWN as well as UP, then the amount should be higher, because well…you don’t like risk! If however, you can handle seeing your balance decrease now and then but also rise with the overall market, then more risk is appropriate. This question can only be answered by you and perhaps an advisor who has your best interest at heart. You can find numerous examples of a “Risk Tolerance Questionnaire” by simply Googling that phrase. If you’ve never taken one, I highly recommend you do. Doing so will help you calculate how your portfolio should be allocated based on your individual tolerance for risk.
Thank you in advance for the help.
I hope what I wrote was of some help.
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