Are you planning on retiring or changing jobs and have a 401(k)? Here are some 401k rollover options.

One of the benefits of a 401k retirement plan is that it can follow an employee throughout his or her career. When changing employers, the investor has four options:

(1.) Stay Invested in Current Plan

Many 401k plan administrators charge record keeping and other fees to manage your account, regardless of whether you are still with the company. These fees can take a significant bite out of your future net worth, especially if you have accounts maintained at several different employers.

(2.) 401k Rollover to New Employer Plan

Practically speaking, this option is only available if the employee has another job offer before leaving their current employer. In some cases, it may be the best option as it is simple. How do you know if it is the right choice? The decision should largely be made based on the investment options of the new 401k plan. If you are unsatisfied with the choices available to you, completing a 401k rollover to an IRA may be a better option.

(3.) Take your Money out in Cash

With the exception of failing to take advantage of an employer’s contribution match program, cashing out a 401k when leaving jobs is the worst decision a working individual can make. Penalty fees and taxes also add into the mix. Most importantly, it is the financial loss that comes from the decades of tax-deferred compounding that capital could have earned had the account owner chosen to initiate a 401k rollover.

(4.) 401k Rollover to a Individual Retirement Account (IRA)

Completing a 401k rollover is almost always the best choice for those interested in providing for a comfortable retirement because it allows the investor’s capital to continue compounding tax-deferred while providing maximum control over asset allocation (i.e., you aren’t limited to the investments offered by the 401k plan provider.)

Maximize your investment potential when you change employers

Call Kevin to take control of your investment dollars by completing a 401k rollover into your own personal IRA.