401k Rollover…is it the right choice?

A great thing about 401k plans are that most companies offer them.  Why this is good news for you is because if you decide to leave your current employer and your new employer has a 401k plan you will most likely be able to do a rollover 401k into their plan easily. Before this used to be a difficult process but with some recent government regulation changes it has become a lot easier to roll your money over.  Not only does this prevent you from having multiple retirement accounts all over the place but you don’t have to mess with the difficulties of managing all of your investments and making sure they are organized properly and performing well.

There are some benefits to a 401k rollover to a new employer as opposed to rolling over to an IRA.  This all depends on the options that are in your new employer’s 401k plan.  To invest in an IRA or single mutual fund in most cases you need a minimum investment.  So if you do not have a lot of money in your 401k it will be more difficult to diversify those funds. With a 401k rollover into a new employer’s 401k plan there are generally no investment minimums so it doesn’t matter the amount of money you have in your current 401k.  This means you can diversify a lot easier with a 401k and this is a big benefit! Read the rest of this entry

Are you considering a cash distribution instead of a 401k rollover?  Well, I am going to be brutally honest in saying unless you are absolutely desperate for money or over the age of 59 1/2, you would be crazy to cash out and should go with a rollover 401k instead!  I do realize that a cash distribution is the most tempting option available for you to take but it can also be the most costly. Read the rest of this entry

So you have or are leaving your current employer. Whether this was your choice or theirs you now have a lot of thinking to do regarding your 401k.  You need to sit down and spend some time thinking about what you intend to do with your investment and decide if a 401k rollover, cash out or keeping your money where it is, is the right choice for you.  You need to think long and hard before making a decision about the money you have in your retirement fund, as some options may mean that you have to pay more taxes on your distribution. Read the rest of this entry