How to legally convert your retirement funds into safer options

If you're lucky enough to still have some money left in your retirement it might be a good idea to find something else to do with it. With the economic status today some retirement funds have dwindled down to practically nothing, so why not try to convert your funds to a safer option? If you're looking to do something else with the money you have left in retirement, here are some tips to legally convert your retirement funds into safer options.

Diversify
First and foremost you will need to diversify your portfolio if you are unsure about whether or not your retirement will actually get you through your retirement years. For example, if most of your retirement is found in strictly stocks, you may find yourself in a world of hurt if and when the stock market crashes. In order to keep more of your retirement safe you will want to diversify your portfolio and invest your money in more than just the "big money maker" stocks. Talk with your financial adviser about different options available for retirement investing.

Bonds vs. Stock
Part of creating a more diversified portfolio is looking into some other available options besides stock. While high performing cyclical stocks are very beneficial to invest in during a hot economy, they may prove to be the vane of your existence when the market turns cold. Therefore some safer options in terms of retirement are shifting the funds within your account to bonds. Bonds typically will not swing in value as much as stocks but are much safer because they won't lose their value. Investing in bond mutual funds or a money market fund might be in your best interest if you're thinking of converting your retirement funds.

In today's economy legally converting your retirement funds into safer options is difficult because so many people are losing money. If you are close to retirement, here are a few things you can do to shift from saving and building your retirement, to spending and taking the money out:

• Have some extra cash set aside. Like we already said, it's not a bad idea to set aside cash in a money market mutual fund, in short term bond funds, or even certificates of deposit.


• Get your retirement assets organized. You may have several different accounts that could be rolled into just one. This will help you keep better track of how much and where the money is coming from and going to.


• Tap in. To get the most from your retirement savings, pull from your taxable accounts first.

It's important to keep in mind that there are certain rules to moving your retirement funds into other accounts. If you are uncertain about those rules you should always ask a financial adviser what type of penalty is associated with moving, converting, or drawing money out early. Legally converting your retirement funds into safer options can be tricky if you are uneducated on how to do it. Do your homework and talk with people who know what they're doing before you make any rash decisions.