Ask an Advisor: Should I Cash Out My 401(k) to Care for My Autistic Son?

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Welcome back to Ask an Advisor, the advice column where finance professionals answer pressing investment questions. Topics can range from retirement planning to taxes to wealth management — or even advice tips — and the questions are from real people.

Today’s question comes from a father in New York City who fears the bear market will erode his retirement savings — and he’s not just worried about himself. Like many American parents, he has a child with autism who will need lifelong care is. Building a solid nest egg is vital not only to the father’s future, but also to his son’s.

In the United States, approximately 2.3% of all children have been diagnosed with autism Centers for Disease Control and Prevention. More broadly, about 17% of children aged 3 to 17 have some form of developmental disability. Many of these children will need health care and other services long after their parents’ deaths, which can add urgency — and emotion — to their financial decisions.

In the case of this concerned New York father, he considers extreme measures to protect his savings. Here’s what he wrote:

Dear consultants,

I am a 59 year old insurance broker based in Queens, New York. My biggest financial concern is securing a future for my 22-year-old son with severe autism. My retirement savings are an important part of my plan, but I worry that this year’s volatility will put them at risk.

I am very concerned about the current market decline. I plan to retire at 67 and I have $1.1 million saved in my 401(k). But with stocks falling and a potential recession looming, I’m wondering if I should now pull it all out and invest in something safer. I have a couple of ideas: I could buy bonds – I-bonds in particular – to beat inflation; I could put all that money into a bunch of high-yield CDs; or I could even put it all into a regular savings account and hope my money lasts there longer than it does in the stock market. I know these may sound like drastic options, but I worry that seven or eight years may not be enough time for the markets to turn around. Or should I just leave everything in the 401(k) and ride it out?

— Questioning in Queens

Here’s what advisors wrote back:

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