Dear Investor,

 

There are some things we can put off or ignore for quite a while with minimal consequences like not tinting the windows to our car or not trimming our trees but is it okay to ignore 401K or retirement saving plans from prior employers. The question is “When changing jobs or retiring, should you rollover your 401(k) savings over to an individual retirement arrangement (IRA) or leave the money in your prior employer’s plan?”

Whatever the decision it should be a conscious and informed decision based on plan costs/fees, investment options, simplicity, and your goals. This will provide a very brief overview of each factor leading to a decision. Plan costs/fees add up over time and can reduce your nest egg significantly. Investment options are important because of fees and type of management either passive or active which also impacts the risk/return paradigm. Simplicity is important because you can combine multiple accounts into one IRA making it simpler to track especially as you age. Your goals are just as important and the industry you are in. It may be common to switch employers often so it may be of greater importance to have an IRA where you can rollover your retirement plan or if you go to a company that does not offer a 401(k) you can contribute to your IRA.

Before closing know that for 401(k) plans employers are fiduciaries who are legally obligated to monitor the funds they offer to ensure they are sound investments. It is very important when seeking advice to find an independent fee-only fiduciary investment advisor or financial planner to help you reach the best decision for your situation. To speak with a fiduciary or get started with your rollover visit www.planvestor.com/services/

Regards,

2 thoughts on “401k Rollover

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