When you left your last job, did you leave any of your personal items behind? Of course you didn’t. So why would you leave thousands of dollars in their retirement plan or 401k? Leaving a job can be stressful and a 401k rollover is probably way down on the to-do list. It’s probably because there are so many hoops to jump through. There are forms to fill out, 800 numbers to call, websites to visit, and it goes on and on. Don’t let the hoops keep you from taking control of your investments and financial future.
Three Things You Should Know About A 401k Rollover:
- If you are near age 55 and think you’ll need the money soon, hit the pause button. Many 401k plans allow you to withdraw funds at separation of service without penalty at age 55. If you roll those fund into an IRA, the penalty free withdrawal is moved up to age 59 1/2.
- You might have Roth or after tax contributions. These need to be handled separately and shouldn’t be commingled.
- If it ain’t broke, don’t fix it. If you have a top notch 401k with high quality and low cost investments, you may be better off staying put.
Companies and the trustees who are responsible for the 401k determine who and what services are provided to the plan. This means they determine what investments to offer and cost structure in addition to many other plan related decisions. It is not uncommon for these companies to make changes to their service providers. You, the participant AND former employee have no say whatsoever in any of the decisions the company makes on your behalf. This is not to say the decisions made on your behalf will always be bad ones and to be fair, some of these changes can improve the company’s 401k plan.
Take control of your investments and financial future and when the time comes to review your options, consult a professional. Most financial advisors can review your paperwork, translate your options into plain English and help you determine whether a 401k rollover is right for you.
You probably didn’t leave any personal items behind at your last job. Don’t leave your 401k behind either.
Do you need help reviewing whether a 401k rollover is right for you?
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