The employer retirement plan (commonly known as a 401k/403b) is an essential savings and investment vehicle available to many individuals today. These plans provide significant benefits to employees, such as tax deferral on employee contributions, employer matching contributions, Roth contribution and greater annual deferral limits than an Individual Retirement Account (IRA).
However, a 401(k)’s features, investment choices and service providers are determined by the employer and offer employees little flexibility. Investors must choose among the investment vehicles offered and work within established rules and limits within their respective plan(s). Choosing the right investments within your plan can be difficult as plan data is not always readily available, and many HR departments often do not understand their own plans well enough to provide guidance to plan participants regarding their investment decisions.
This is the third in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1 | 2 | 3 | 4
Now that you understand at the pros and cons of leaving your 401(k), 403(b), or other employer sponsored retirement plan with a previous employer let’s take a look at another option, rolling over your retirement account(s) from your previous employer into an IRA.
The advantages of converting your retirement account(s) to an Individual Retirement Account (IRA) include:
Opening your IRA with a discount brokerage to receive much lower transaction costs.
More visibility of your current investments and more detailed record keeping.
The ability to invest in thousands of different securities instead of just selecting from a pre-selected list of 5-15 options. This allows you to create a specific portfolio designed to fit your unique needs, not just be lumped together with 100’s to millions of other investors.
In most cases much lower administration costs. In a self-directed IRA you may be able to greatly reduce your expenses by removing the extra administration fees present in your previous retirement account. Read the rest of this entry »
This is the second in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1 | 2 | 3 | 4
Are you one of the many people that still have company retirement plans (401(k)s, 403(b)s, etc.) held at your previous employer(s)? As with all decisions we face, the decision to rollover a company retirement plan must be done with adequate information and disclosure so that you know in detail all of the advantages and disadvantages related to each possible choice. With that in mind, lets discuss the pros and cons of keeping your retirement funds in your previous employer’s 401(k). Read the rest of this entry »
This is the first in a four part series designed to help you determine the best way to proceed with your previous employer’s company retirement plans, including 401(k)s, 403(b)s and more. Part 1| 2 | 3 | 4
What do you think about when you get a new job?
If you’re like most, you’re focused on what the new employer expects from you, learning your position, new processes and dozens of other details that come along with a new position.
This can be a very stressful time for any individual and although it’s the last thing anyone wants to think about, it’s important to remember your company retirement plan(s). These include 401(k)s, 403(b)s, SIMPLE IRAs, Thrift Savings Plans and more. If you’re not consciously thinking about your 401(k) or other employer sponsored plan it can be easy to think “I’ll get around to it later” and eventually forget about it all together. Read the rest of this entry »