Manage Your Money: Financial Planning When Changing Jobs

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(KTVI) – What to do you need to do if you change jobs, with your 401k plan?  Bob Wamhoff from Wamhoff Financial Planning and Accounting Services was on the mid day show with three options, you have.

Option 1: Leave your 401k with your old employer
The path of least resistance
No one is managing or monitoring your investments for you
Your plan may have not had many investment options to choose from
Without your employer match, this is not the best option

Option 2: Roll your old 401k into your new employer’s plan
This puts money back in your control
No tax consequences (unless you borrow against it)

Putting the funds into a new 401k plan allows you the option to borrow against it at some point if you need to.

You’re probably monitoring this more frequently

Again, employer sponsored 401k plans may not have the best investment options

Whether or not you roll your old 401k to your new employer, do enroll in it! With an employer match, you’re growing your investable dollars at a much quicker rate.

Option 3: Roll your old 401k to an IRA fund
IRA funds have better investment options
No tax consequences

You control which IRA fund you choose, so you can choose a fund which more closely matches your investment strategy and retirement goals

These funds are actively managed
You cannot borrow against an IRA fund if the need arises

In Service Withdrawals
Available for those 59-1/2 and older

Gives those nearing retirement the flexibility to take existing 401k money and roll it into an IRA account in a manner that is more customized for their needs as they get older.

There are no tax penalties

They still qualify for the employer match for those funds going into their existing 401k plan.

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