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401(k) plans are designed to help individuals save for retirement through tax-deferred contributions that allow you to build up your savings somewhat quickly because taxes aren't paid on the money until you retire or leave your job.
And one great thing about a 401(k) is that your money is easy to move around since you can roll it over into other investments after leaving a job. But what should you do with it?
Here are four easy options:
If you're considering a job change but aren't quite sure which employer's plan is right for you, this is a good option to consider. By letting a former employer keep your savings, you have more time to evaluate the investment options and plan details of a new employer's plan.
Whether you are aging out of your employer-sponsored plan, retiring early, or switching jobs, rolling over your 401(k) to a Traditional IRA may give you more flexibility in managing your savings. Traditional IRAs are tax-deferred retirement accounts that help you maintain maximum control over investment decisions.
A rollover allows you to take your 401(k) plan with you when you leave your old employer. If your new employer accepts the rollover, you can leave your money in your old account or transfer it to the account with your new employer.
Unless you know what you're doing, don't just withdraw your money. Withdrawing all of the money from your account is a very costly move in the long term. Any cash you withdraw is taxable, not forgetting the 20% federal holding rate.
There is a standard 60-day rollover requirement. Exceptions may be granted in extenuating circumstances.
What to do with an old 401(k)? It's not always clear-cut. Trying to figure out how to retire is complicated. There are so many different things to consider, questions to ask, and pieces of information to gather... which can be tough to overcome if you don't have all the right information. It can be overwhelming.
Everyone is different, so of course, everyone's situation will be unique. The biggest thing to remember is that the rules among retirement plans vary, so it's important to find out the rules your former employer has as well as the rules at your new employer.
Your best bet is to work with a professional to get the most out of any financial decision you make.
That's Where We Come In
At Garlesky Insurance Agency, we understand the importance of a 401(k) rollover and how it can help you secure your financial future. For over 40 years, the professionals at Garlesky Insurance Agency have been working hard to earn a reputation as one of the leading insurance and finance agencies in America.
If you're interested in a rollover or IRA-Transfer, calling the 401(k) rollover experts at Garlesky Insurance Agency is the best first step. We'll help you determine which course of action is best for your situation, so you can move forward with confidence.
Contact us today for a free consultation.