What to do with your 401(k) when you retire

What to Do With Your 401(k) When You Retire

What to do with your 401(k) when you retire

You know all about saving in your 401(k) while you’re working, but how exactly should you handle those savings when you retire?

If you’re not sure, join the crowd.

A quarter of 401(k) participants 45 and older say they don’t know what they’ll do with their retirement account when they retire, according to a survey of 1,000 people with a 401(k) account conducted for Cerulli Associates, a research and consulting firm.

Another 25% said they’ll ask their financial advisor what to do, which is another way of saying they’re not sure what to do.

The best approach depends on your situation. Following these four steps can help you get started.

1. Review your 401(k)’s payout policy

One key question in retirement is how you’ll create an income stream — that is, a retirement paycheck — from your savings. If your 401(k) lets you set up regular withdrawals or an installment payment plan, then it might make sense to keep your money in the plan.

“If your 401(k) doesn't allow for periodic payouts, consider rolling your savings over to an IRA.”

A growing number of employers allow retiring workers to say, “Pay out X dollars per month,” says Steve Vernon, author of “Retirement Game-Changers” and a research scholar at the Stanford Center on Longevity.

But 401(k) plans vary widely. Some allow lump-sum disbursements only. Others might offer partial withdrawals, but the number is limited. If and when you need periodic payments, you’ll need an account that allows that. If your 401(k) doesn’t, consider rolling your savings over to an individual retirement account. See this quick-start guide on 401(k) rollovers for more on this process.


NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula for online brokers and robo-advisors takes into account over 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.

2. Take note of 401(k) fees

There are additional reasons to consider a rollover to an IRA. While you’re taking a look at your 401(k) distribution options, jot down any fees you’re paying — both investment expense ratios and plan administration fees. Ask your employer for details if you can’t find the information.

Generally, a mutual-fund expense ratio that tops 1% is too expensive. Ideally, you should be paying much less — closer to 0.20% or so.

Can’t find a low-cost fund in your plan? Proceed to the next step.

3. Compare your 401(k) to an IRA

When deciding whether your existing 401(k) or an IRA is the best choice for you, consider these questions:

  • Can an IRA offer better payout options than your 401(k)?
  • Can an IRA offer lower costs?
  • Can an IRA offer better investment choices?

If you’re employed at a large company, there’s a good chance your 401(k) has some low-cost investment options. A 401(k) that combines low costs with robust payout options and investment choices could be a great place to keep your money, even after you retire.

But if your 401(k) has limited payout options, high administrative fees or inferior investment choices, consider an IRA.

“One big reason why a lot of clients want to move their money from a 401(k) into an IRA is that the flexibility of investment options as well as distribution options kind of goes through the roof,” says Matt Ventura, a senior wealth advisor at Exencial Wealth Advisors, a fee-only planning firm in Frisco, Texas.

Relatedly, if you’ve got savings spread out over a variety of 401(k) and other accounts, consider rolling those assets into your current plan or a new IRA.

» View NerdWallet's picks for best brokers for IRA accounts

4. Assess income strategies

Let’s return to the question of your retirement income stream. Specifically, you’ll want to consider where your monthly income will come from and how much of it will be from your savings. Also, you'll want your retirement income to exceed your expenses, so you’ll need to estimate your retirement expenses. Here’s what an average retirement costs.

“Consider delaying your Social Security benefits. Every month you delay, your benefit rises.”

Then, you’ll need to figure out which accounts to tap first, and how much to take. One idea? Take a page from the IRS and use their formula for required minimum distributions from retirement accounts. For more on this strategy, read our story on how not to run money in retirement.

Also, consider delaying your Social Security benefits. Every month you delay claiming Social Security, your monthly benefit rises. If you delay claiming your benefits until age 70, you’ll collect the highest monthly payout possible.

Social Security “is the best retirement income you can get,” Vernon says, because your benefits are indexed for inflation and are guaranteed non-volatile income.

Источник: https://www.nerdwallet.com/article/investing/what-to-do-with-your-401k-when-you-retire

Making a choice for your 401(k)

What to do with your 401(k) when you retire

Maybe you’ve switched jobs to take on new challenges. Perhaps you’re thinking about changing career paths for something more rewarding. Or maybe you’re finally getting ready to retire. (Congratulations!)

We understand when your life changes, other things may change too— your goals for retirement. We’ll help you consider your options for your 401(k) accounts from past jobs, so you can feel confident you’re on track for the future you want.

Roll your money to an IRA

Transfer your money into an Individual Retirement Account (IRA).

  • Your savings stay invested, with similar tax advantages
  • You have access to a wide range of investment options
  • You can roll in retirement savings from other jobs
  • You can keep contributing money to the account
  • Loans aren't allowed, but you may be able to withdraw money before you retire under certain circumstances

Keep your money where it is

Keep your savings invested in your former employer's retirement plan.

  • Your savings stay invested, with the same tax advantages
  • You continue with the plan's investment options
  • You can't make additional contributions
  • Your past employer may decide to make changes to the plan that impact your account
  • Loans aren't allowed, but you may be able to withdraw money before you retire under certain circumstances

Move your money to your new employer's plan

If you have a new employer offering a retirement plan, you may be able to transfer your savings into it.

  • Your savings stay invested with the same tax advantages
  • You might be able to roll in savings from other retirement plans
  • You can make ongoing contributions.
  • The investment options depend on what the plan offers.
  • You may be able to take out a plan loan, or withdraw money before retirement under certain circumstances

Cash out your account balance

You can take your savings as a lump-sum cash distribution.

  • You get immediate access to your money, but you may lose up to 30% of it to taxes and penalties
  • You’ll miss out on any future growth or earnings
  • May move you to a higher tax bracket, which means you might have to pay more in taxes

So, what’s right for you?

Use this chart to help see which options match your wants and needs.

 Keep your money where it isRoll your money into a new IRAMove your money to a new employer planTake a cash distribution
Varies by plan1Varies by plan1
Varies by planVaries by plan
Varies by plan
Varies by plan

Explore other retirement savings account options (PDF).

Now that you’ve got the knowledge you need to make the right decision for you, you’re ready to take the next step.

  • Staying in your old plan? You’re already done. Keep watching your account statements to make sure your savings are on track with your goals. And remember, you can roll your savings to an IRA at any time in the future, if you want to.
  • Moving your savings to a new 401(k) plan? Contact HR at your new employer and they’ll help you get started.
  • Rolling over to an IRA? Get the scoop on how to start an IRA, or see if a Principal IRA is right for you.

Investment and Insurance Products are:

  • Not insured by the Federal Deposit Insurance Corporation (FDIC) or Any Federal Government Agency.
  • Not a Deposit, Obligation of, or Guaranteed by any Bank or Banking Affiliate.
  • May Lose Value, Including Possible Loss of the Principal Amount Invested.

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

Financial professionals are sales representatives for the members of Principal Financial Group®. They do not represent, offer, or compare products and services of other financial services organizations.

Insurance products and plan administrative services provided through Principal Life Insurance Co. Securities offered through Principal Securities, Inc., 800-547-7754, member SIPC. Principal Life and Principal Securities are members of Principal Financial Group®, Des Moines, IA 50392.

Источник: https://www.principal.com/individuals/build-your-knowledge/making-choice-your-401k

What happens to your 401(k) when you change jobs?

What to do with your 401(k) when you retire

You’ve worked hard to save money in your 401(k) or 403(b), but what should you do with this money if you change jobs? You have several options and it’s important to consider each carefully.

Your Ameriprise advisor will evaluate your options and help you decide your financial goals. If you don’t have an advisor, you can search for one in your area.

If you are happy with your current investment options and your former employer’s qualified retirement plan allows you to maintain your account, this might be the most convenient choice, but you should still evaluate your options.

If you choose to leave your savings in the plan, be sure to track your account regularly, review your investments as part of your overall portfolio and keep the beneficiaries up to date.

Maintaining a complete financial picture of all your retirement savings can help both you and your financial advisor monitor your progress and stay appropriately invested for your goals, risk tolerance and time horizon.

Additional considerations:

  • The amount of money you have in your account. If you have less than $5,000 in your account, you may be required to transfer your money that retirement plan, and if you have less than $1,000 in the account, your former employer will ly cut you a check for the appropriate amount.
  • Employer stock. If you have employer stock that has grown significantly in value, tax breaks for employer stock distributed in kind from a qualified plan will be lost if you roll to an IRA or transfer to a new employer’s plan.

Your new employer’s qualified retirement plan might offer investment options that better support your financial goals. It could also be easier to track your investment performance in one account versus several. It’s worthwhile to talk with an Ameriprise advisor who will compare the investments and features of both plans.

Should I transfer over my 401(k) to my new employer?

Using a direct transfer method, or 401(k) to 401(k) transfer, you can transfer your entire account balance without taxes or penalties. You can work with your new employer’s 401(k) plan administrator to select how to allocate your savings into the new investment options.

Additional considerations:

  • Transfer rules. Failure to follow the 401(k) transfer rules may result in extra penalties and taxes. For example, if you receive your funds from your previous employer’s retirement savings plan in the form of a check, mandatory 20% withholding will apply and failure to deposit the funds into a new retirement savings account within 60 days may result in tax and penalties.
  • 401(k) loans. You can’t borrow against IRAs, but you may be able to borrow money from your 401(k). However, there could be long-term implications to your retirement savings goals, so you should carefully weigh your options and discuss the pros and cons with your advisor.

With this option, you become the owner of your retirement savings, rather than a participant in an employer qualified plan. The primary benefit of an IRA over a typical 401(k) is access to a wider range of investment options. You may also be able to consider annuities or other investments with guaranteed retirement income options.

You have several direct rollover options:

Roll your 401(k) or 403(b) to a new or existing traditional IRA. 

  • No taxes are due when you move the asset, and any new earnings accumulate tax deferred.

Roll your traditional 401(k) account to a new or existing Roth IRA. 

  • This is also known as a 401(k) to Roth IRA conversion
  • You will pay taxes on the pretax contributions and earnings you convert.
  • Earnings that accumulate after the rollover will be eligible for tax-free withdrawal when your Roth IRA has been open at least five years and you are at least 59½ years of age.

Roll your Roth 401(k) account to a new or existing Roth IRA. 

  • No taxes are due when the money is moved, and any new earnings accumulate tax free if conditions are met.
  • Earnings are eligible for tax-free withdrawal once the Roth IRA has been open at least five years and you reach age 59½.

Additional considerations:

  • Contribution limits don’t apply to rollover. Although IRAs typically have an annual contribution limit of $6,000, there is no limit on funds that come from a 401(k) rollover. Even if you have a large sum in your 401(k), you can deposit all of it into a traditional IRA through the rollover process.
  • Required minimum distributions may take effect. If you’re still working at age 72, you’ll be required to start taking minimum distributions from your IRA. The penalty for not taking your required minimum distribution payments is very steep. By comparison, you generally don’t have to start taking money your 401(k) until you retire.
  • Under federal law, 401(k) plans offer protection from creditors, and funds cannot be seized if you are in bankruptcy proceedings 
  • You may be able to borrow money from your account, depending on your plan
  • Required minimum distributions don’t begin until you retire
  • ly fewer investment options to choose from
  • Less control over your savings (your employer selects the investments you choose from)
  • Not all plans offer a Roth option
  • Typically, a wider variety of investment options including managed accounts, annuities and alternative investments
  • More control over your savings
  • Can choose between Roth and traditional IRAs for added flexibility
  • Assets rolled from a 401(k) are protected in the event of bankruptcy but protection from creditors in other circumstances varies by state
  • Cannot borrow money
  • Required minimum distributions begin at age 72
  • You must be 59 ½ to avoid the premature distribution penalty (unless an exception applies)

Cash outs provide exactly what you would expect — cash. But there are many implications to consider:

  • The cash out is considered income, and you may incur local, state and federal taxes on the money that you withdraw.
  • Removing funds from your retirement account and paying taxes may mean you will need to work longer to make up the difference. You will also lose the benefit of time. 
  • You will be required to pay a 10% early withdrawal penalty on top of the taxes if you left your employer prior to the year you turned 55 and are younger than 59 ½, meaning you won’t end up with as much money as you may have planned for.

Looking for more information?

Our rollover evaluator tool guides you through a series of questions about your individual situation and helps you evaluate your options.

Contact an advisor today.

Ameriprise advisors know that trust is a matter of work, not words.

Or, request an appointment online to speak with an advisor.

There's a sense of confidence that comes from feeling in control of your finances – and working with a financial advisor can help you get there. Please share your experience and tell your friends and family about me.

Background and qualification information is available at FINRA's BrokerCheck website.

Do not use this information as the sole basis for investment decisions; it is not intended as advice designed to meet the particular needs of an individual investor.

Be sure you understand the potential benefits and risks of an IRA rollover before implementing. As with any decision that has tax implications, you should consult with your tax adviser prior to implementing an IRA rollover.

Diversification does not assure a profit or protect against loss.

Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.

Ameriprise Financial Services, LLC. Member FINRA and SIPC.

Источник: https://www.ameriprise.com/financial-goals-priorities/retirement/what-to-do-with-your-401k-plan-when-you-change-jobs

What should I do with my 401(k) when I retire?

What to do with your 401(k) when you retire

By Jenn King

So, you’ve finally let the company know that you are ready to retire. You’ve given them notice of your last day and now they are scrambling to make sure they are prepared for your departure.

You’ve already done your planning.  You know your plan looks great and you are ready to take some well-deserved time for yourself.  But have you thought of everything?  What about that 401k – what are your options?  Should you rollover your IRA or keep it in the plan?  Or maybe you cash it out and take that trip of a lifetime you’ve always wanted to do?  Let’s take a look at your options.

OPTION 1 – Keep your 401k in the Employer Plan

Some things won’t change:

  • Investment Options –You’ll have the same investment options.  If you are happy with the options, that may be fine.  If you are looking for broader investment choices and better diversification in your retirement account, there are ly better options out there.
  • The investments are institutionally priced, so they are typically low cost. However, it will be important to review your annual 401(k) disclosure to be clear on the true cost.
  • Your account grows tax-deferred and if you take withdrawals from the account you will pay ordinary income tax on the entire withdrawn amount. 

Some considerations:

  • If you have less than $5,000 in the plan, the money will be automatically sent to you.
  • Any time you take a distribution from the plan, they will automatically withhold 20% for taxes.  You do not have the option to NOT withhold. 
  • You will have to take Required Minimum Distributions (RMDs) when you turn age 72.  However, instead of being able to aggregate your RMD’s from one account, your 401k will require you take out your RMD from your 401k in addition to your potentially aggregated RMD from a single IRA.

A good reason to keep it in your Employer Plan?

  • If you have planned well enough to retire before the age of 59 ½, as long as you are age 55 or older, you can take withdrawals from the plan WITHOUT paying the 10% penalty.  You still have to pay ordinary income taxes, but the penalty becomes a non-issue.

OPTION 2 – Roll the money over into an IRA

What won’t change:

  • Your money continues to grow tax-deferred.  With the roll over, there are no tax implications if you move the money from the employer plan directly into the IRA. 

Some considerations:

  • Fees and expenses can vary between different providers.  It will be important to do your research to make sure you understand how much you are paying for your investment advice.

A good reason to roll it over into an IRA?

  • Investment Options – you will have many more investment options to choose from than your employer plan
  • Strategic Tax Planning – When you take distributions, you can choose to withhold taxes or pay taxes when you file your taxes at the end of the year.
  • If you are under age 59 ½ you can take distributions for higher education expenses or as a first time homebuyer without paying the 10% penalty.
  • Simplification – you may want to combine your individual retirement accounts from your past employers into one IRA that will allow you easier management of your money as you age.

OPTION 3 – Cash Out!

This is absolutely the LAST thing you want to do with your 401(k) when you retire.  Why? Because every dollar of your withdrawal is going to be taxed as ordinary income – ALL AT ONCE!  And if you are under 59 ½ then you will also pay at 10% penalty on that money. 

Let’s say your 401k is worth $250,000.  You file Married Filing Jointly on your tax return.  If there is no other income, you will pay about $42,000 in taxes.  If you are also under age 59 ½ then you will pay an additional $25,000 early withdrawal penalty.  So what are you left with?  $183,000.  That’s a tough pill to swallow when you worked all of those years to save for retirement!

The bottom line is that this is an individual decision as only you know your cash flow needs, tax situation and retirement goals.  It is important that you do your due diligence and thoroughly explore your options or work with a Financial Planner to help evaluate the best steps for you and your family.


Please remember that past performance may not be indicative of future results.

  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Paragon Wealth Strategies, LLC [“Paragon”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Paragon.  Please remember that if you are a Paragon client, it remains your responsibility to advise Paragon, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Paragon is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Paragon’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.wealthguards.com. Please Note: Paragon does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Paragon’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Also Note: IF you are a Paragon client, Please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.

Источник: https://www.wealthguards.com/blog/what-should-i-do-with-my-401k-when-i-retire

What to do with your 401k when you retire

What to do with your 401(k) when you retire

Finally taking that step to retire is a big one (make sure you’ve asked yourself the right questions before you do). But if that time has come, congratulations! You have worked hard to get to this point and are ready for the next chapter in your life.

many others, you are now facing an important decision: What should I do with my 401(k) balance?

Below we explore multiple options, along with the pros and cons of each:

1. Leave the balance within the plan

Even though you may be leaving your employer, that does not mean that you have to take your 401(k) balance with you. Most retirement plans allow you to leave your 401(k) within the company’s plan even after you retire.

Pros: Leaving your balance within your old employer’s plan will allow you to maintain ERISA protections that could be taken away if you decide to roll over the balance into an IRA and then continue contributing to that IRA.

Additionally, many 401(k) plans hire investment managers to help participants make informed financial decisions. If you were to leave the plan without working with another financial professional, these services would be lost.

Lastly, leaving your balance within the plan would keep the account invested in the market where you can lean on a long-term investment return on your money that will hopefully outpace inflation.

Cons: Although you will stay invested by leaving your 401(k) as is, if you do not roll over into an IRA, you will be limiting your investment options to those available within the plan. Similarly, you may not get the same freedom when it comes to distributions.

This may differ on a plan-by-plan basis, but some plans do not allow for scheduled or partial distributions, regardless of age or termination of employment. Many people also overlook the difference in Required Minimum Distributions (RMDs) between Roth 401(k) and Roth IRA accounts. While RMDs must start in a Roth 401(k) for retired participants at age 72, Roth IRAs have no such RMD requirement.

If you have a Roth balance in your 401(k), you may benefit rolling that balance to a Roth IRA when you retire.

Things to consider: Before making any decisions, compare and contrast your options.

Specifically, look at the level of service you are currently provided within the plan versus the level of service you can expect if you were to exit the plan.

Additionally, comparing the fees between rolling over your balance into an IRA and the expenses currently paid to stay in the plan is important.

2. Rollover the balance into an IRA

A direct rollover from a 401(k) and into an IRA is a penalty-free and tax-free transfer. your 401(k), an IRA still receives tax-advantaged treatment from the IRS, along with other similarities.

Pros: By leaving your old company’s 401(k) plan and rolling over your balance into an IRA, you will have more freedom and flexibility over the distributions from your account.

Also, you will ly increase your overall investment options while remaining invested.

If you have an outside financial professional or advisor, you also will be able to receive personalized advice on the account while potentially consolidating accounts under one money manager.

Cons: A main disadvantage of an IRA is that if you retire before age 59.5, you will not be able to access your funds without a 10% early withdrawal penalty until that age is reached. In contrast, the “Rule of 55” allows for a 401(k)-plan participant who is between the ages of 55 and 59.

5 to bypass the early withdrawal penalty as long as the account stays within the 401(k) plan. Furthermore, the ERISA protection that accompanies Qualified Retirement Plans, such as a 401(k), will not transfer to an IRA.

Although IRAs are not ERISA-qualified, the funds are still protected from creditors under BAPCPA if you file for bankruptcy.

Things to consider: Again, it’s important to compare the fees and costs associated with rolling your 401(k) into an IRA versus the expense to leave the account within the plan.

You should also keep in mind your expected cash flow and distribution needs. As stated before, an IRA may allow for more control and flexibility, but keep in mind the “Rule of 55.

” Many people also find the simplicity of consolidating accounts under one money manager or account appealing, and rolling into an IRA allows you this opportunity.

3. Cash out your balance

A third option allows you to “cash out” your account in a lump sum.

Pros: Generally, cashing out your 401(k) is not a good idea. A silver lining may be the access and liquidity of your funds, as they no longer are invested and are sitting in readily available cash.

Cons: Having your funds in cash ultimately means that you are no longer invested and will miss out on the potential of future investment return.

It’s important to remember that a 401(k) account is meant to get you through retirement, and not to retirement.

By staying invested throughout retirement, you can expect your account balance to last longer than it would if it were to sit in cash even as you take distributions to cover your living expenses.

If you cash out your 401(k), you will also be liable to pay all taxes associated with the transaction.

To specify, all “pre-tax” money will be taxed at ordinary income rates in the year that it is cashed out. Depending on the size of your account, this could lead to a significant tax liability.

On top of that, if you are under the age of 59.5, you will also be subject to the 10% early withdrawal penalty.

Things to consider: If you are thinking about cashing out your 401(k), consult with your financial and/or tax professional.

Usually it makes more sense to roll over the account into an IRA or to leave the balance within your prior employer’s plan for the reasons given above.

The ultimate tax liability, your age at retirement and necessary investment growth to accommodate expected cash flow in retirement are things to keep in mind.

Making a decision on what to do with your 401k when you retire?

Wipfli Financial Advisors can help walk you through your options and how they relate to your individual situation. Contact an advisor to learn more, or continue reading on:

How you can save on health insurance costs when approaching retirement
8 questions to ask yourself before you retire
How to save for retirement if you’re past your peak investing time


Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at www.adviserinfo.sec.gov. Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.

Источник: https://onebiteblog.com/what-to-do-with-401k-when-you-retire/

How to roll over a 401(k): What to do with an old 401(k)

What to do with your 401(k) when you retire

  • 4 options for an old 401(k): Keep it with your old employer, roll over the money into an IRA, roll over into a new employer's plan, or cash out.
  • Make an informed decision: Find out your 401(k) rules, compare fees and expenses, and consider any potential tax impact.

Changing or leaving a job can be an emotional time. You're probably excited about a new opportunity—and nervous too. And if you're retiring, the same can be said. As you say goodbye to your workplace, don’t forget about your 401(k) or 403(b) with that employer.

You have several options and it’s an important decision.

Because your 401(k) may be a big chunk of your retirement savings, it's important to weigh the pros and cons of your options and find the one that makes sense for you.

Here are 4 choices to consider.

Most companies—but not all—allow you to keep your retirement savings in their plans after you leave.

Some benefits:

  • Your money has the chance to continue to grow tax-deferred.
  • You can take penalty-free withdrawals if you leave your job at age 55 or older.
  • Many offer institutionally priced (i.e., lower-cost) or unique investment options.
  • Federal law provides broad protection against creditors.


  • If you have less than $5,000 in the plan, the money may be automatically sent to you (or sent to an IRA for you).
  • If you choose to keep the money in your former employer's plan, you won't be able to add any more money to the account, or, in most cases, take a 401(k) loan.
  • Withdrawal options may be limited.

    For instance, you may not be able to take a partial withdrawal; you may have to take the entire balance.

  • After you reach age 721, you'll have to take annual required minimum distributions (RMDs) from a traditional 401(k).

If you hold appreciated company stock in your workplace savings account, consider the potential impact of net unrealized appreciation (NUA) before choosing between a rollover or an alternative.

A Rollover IRA is a retirement account that allows you to move money from your former employer-sponsored retirement plan, into an IRA.

You can open the IRA with a bank or brokerage firm. Make sure to research fees and expenses when choosing an IRA provider, though. They can really vary.

Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: