Thanks for voting!Left your job? Job left you? However it happened, but especially if the latter, added stress can enter your life. Understandably, things like managing your old 401(k)don’t exactly make it to the top of your to-do list. But that doesn’t mean you should forget about it.
So when the dust settles (usually around the time you get comfortable doing phone interviews in your PJs), take a good look at your 401(k) options. Then take the best path for your financial future.
- Cash out. That probably sounds really good, right? Especially if you’re not starting a new job right away. But this option is bound to be less tempting once Uncle Sam holds back 20% of that money for income taxes plus an additional 10% tax penalty for early withdrawal.
- Leave your assets in the 401(k). You can only do this if your account is worth over $5,000 and your old employer is continuing the plan. Since you’re not getting any matching funds though, take a close look at the breadth of investing choices and the fees (some hidden) that you’re paying. If the choices and fees weren’t all that great when you worked there, they won’t be now either.
- Roll assets into IRA. An Individual Retirement Account makes it easy to continue growing your retirement savings tax-deferred, often with no fees and broad investing choices. We’ve always been fans of DIY, which naturally makes this is our favorite option.
Keep in mind, though, everyone’s situation is different. No matter how close you are to retirement, know your own needs and goals, then make your own decision. Oh, and here’s a toast to your next job – go ahead, raise that “World’s Greatest Boss” coffee mug of yours.
Tags: 401(k), IRA, Job, Retirement
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The best option to rollover your 401k is to put that money into a Roth IRA, especially when taxes are low. The next best option is to roll it over to a traditional IRA. You should never take that money out of the investments until you are at retirement age.
How do I roll my 401K from TIAA-CREF into an IRA? And, how can I get an updated copy of it?
Thank You,
Seymour Rosenfeld
Rollover is easy — contact your who’s holding your 401K holder to get the latest statement. Then open your new rollover IRA (whether Roth or Traditional IRA) tell them you’d like to rollover your existing 401K. It’s just a form that transfers your assets to the newly created Rollover IRA. You can do the same with government plans like 403bs or 457s plans but there usually another form to fill out from you provider (of the 403b or 457 plan) to transfer it to the Rollover IRA.
I am 70 years and will be leaving my job the end of this year. I presently have a 401K which I want to roll over into an IRA so . What will the charges be, maintenance fees, etc.
If you are in the TSP I would advise you to consider leaving the money there untill you need to withdraw it. the reason is the fund expenses are much lower than ANYTHING you can get elsewhere.
In the long run, fund expenses probably make more of a differe3nce than the difference in returns between two similar funds.
What is exactly 401(k)?
thanks.