The 401(k) Rollover

Posted: July 6, 2017 at 7:22 pm by Skip Kelley

Many employers offer an employer-sponsored retirement account called a 401(k), as I’m sure you’re aware. But, many people aren’t aware that when you leave a job and you’re preparing for retirement, that the money in your employer-sponsored 401(k) provides many benefits to “take the money with you”.

Let’s take a look at a few of the benefits of rolling over your 401(k):

  1. Lower Fees: Most, if not all 401(k) plans have some type of administrative fee associated with managing the account. When rolling it over to an individual retirement account, you can find other investment “vehicles” that do not charge an administrative fee.

  2. The Options: A typical 401(k) offers a limited selection on investment allocations. With an IRA you can gain access to a multitude of investment options such as, bonds, mutual funds, stocks index funds and exchange traded funds.

  3. Taxes: If you do choose to rollover your 401(k) to a traditional IRA or individual retirement account, it allows you to keep your money tax-deferred.

  4. Choose Your Own Risk: When the time comes to take your 401(k), you can choose the amount of risk that’s best suited for your retirement years. Would your prefer to put your monies into a managed account where your money is all in the market? Or would you want to ensure no loss of principal with an annuity?

Before making any decisions on what your next best move is, I would recommend one thing: ask questions! What I just covered above, was just the very tip of the iceberg. What’s below the surface is what I’ve spent several years of my life studying, learning, following and anticipating for my clients. And, that’s what I’m here for – to guide you through every step of the way on your financial journey.

This is one of those “life events” that we often talk about, one of those, “Call-Me-When…” times. So, if you find yourself pondering over what you should do with your 401(k) when you’re leaving your job and planning your retirement, give me a call so we can discuss.

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