What Should I Do With My 401(k) When I Retire?

Do you want a one time Asset that is always decreasing or an Asset that lasts for generations?

Retiring is a huge milestone—but it also raises one of the most important financial questions you’ll ever face:

What should I do with my 401(k) now that I’m retired?

The answer isn’t the same for everyone. Taxes, investment choices, inheritance rules, and your long-term goals all play a role. In this guide, we’ll walk through your options, the pitfalls most retirees miss, and the smarter ways high-net-worth families protect and grow their wealth.

The 5 Main Options for Your 401(k) at Retirement

1. Leave it with your employer

   • Pros: Easy, no action required.

   • Cons: Limited investment choices, often higher fees, and less flexibility.

2. Roll it into an IRA

   • Pros: More investment options, often lower fees.

   • Cons: Still taxable, still subject to Required Minimum Distributions (RMDs).

3. Cash it out

   • Pros: Immediate access to funds.

   • Cons: Big tax hit, potential penalty, and your money stops compounding.

4. Annuitize it

   • Pros: Lifetime income guarantee.

   • Cons: Loss of control, lower returns, high costs.

5. Convert to Roth IRA

   • Pros: Tax-free growth and withdrawals.

   • Cons: Upfront tax bill, may not be best for large balances.

The Hidden Risks Most Retirees Miss

Even if you roll over or “diversify,” traditional retirement accounts carry risks:

• Taxes on every withdrawal – Uncle Sam becomes your biggest partner.

• Required Minimum Distributions (RMDs) – forcing withdrawals, even when you don’t need income.

• Inheritance headaches – your kids may face large tax bills within 10 years under the new rules.

• Market volatility – retirement accounts stay exposed to losses you can’t recover from.

A Smarter Path: Turning 401(k)s Into Tax-Free, Multi-Generational Wealth

Wealthy families don’t stop at the “traditional” choices. Instead, they look for ways to:

• Eliminate taxes on growth and income.

• Create predictable, guaranteed income for life.

• Protect money from lawsuits and creditors.

• Pass on wealth tax-free to children and grandchildren.

At Platinum Endowment, we use advanced strategies—like private structured endowments and specialized insurance funding—that transform pre-tax retirement accounts into tax-free income streams and legacy wealth.

It’s like converting your 401(k) into a personal family endowment—similar to what universities and foundations use—built to last not just through your retirement, but for generations.

Quick Example

• Retiree with $1 million in a 401(k).

• Traditional path: Roll into IRA, withdraw slowly, pay taxes every year. Net inheritance after taxes = significantly reduced.

• Endowment path: Redirect into a tax-advantaged structure. Retiree enjoys predictable, tax-free income, while the family receives a multi-million-dollar legacy, untouched by market losses or IRS rules. Turn $1 million into $50 million.

FAQs

Should I roll my 401(k) into an IRA when I retire? It’s an option, but it keeps you in the same tax system—still taxable, still subject to RMDs. It may be fine short-term, but it’s not the best way to maximize wealth long-term.

Can I just cash out my 401(k)?You can, but expect a large tax bill and possible penalties. You’ll also lose the benefit of future growth.

What’s the best way to pass my 401(k) to my kids? If left inside a traditional retirement account, your children will have to liquidate it within 10 years—often at the highest tax bracket. Better options exist to transfer wealth tax-free.

The Bottom Line

Your 401(k) isn’t just a retirement account—it’s a powerful wealth engine if used correctly. But if you treat it like “just another IRA rollover,” you could lose hundreds of thousands to taxes and missed opportunities.

At Platinum Endowment, we help retirees, business owners, and high-net-worth families transform their retirement accounts into lifelong income and tax-free family wealth. Multiplying income you can rely on guaranteed regardless of market conditions or business cycles for everyone in your family. See how to safely 10X to 50X your money.

👉 If you’re retiring, sold your business, or wondering what to do with your 401(k) or IRA, schedule a private consultation today.