D is for Don’t Leave your 401(k) Behind!

D is for Don’t Leave your 401(k) Behind!

With the state of the world these days, many of us are changing jobs or no longer working. Whatever the reason may be, when you leave your employment, it is important to decide what to do with your 401(k) retirement plan. You worked hard to save that money, so why leave it behind and let your former employer administer your 401(k)  plan.

Luckily, there are a few different options for how to roll your 401(k) retirement plan over so you don’t lose any of your hard-earned savings. Here are a few options and things to keep in mind during the process:

  • First, you want to act fast. Even though you have some options, you’ll want to take care of your 401(k) in a timely manner as to not lose out on opportunities with your new employer.
  • If you have invested more than $5,000, in your 401(k) you can leave it with your former employer. If you have invested less than 1,000 dollars, you can often cash out without penalty. Depending on your previous employer’s investment plan, these options could be the best for you.
  • If your new employer has an excellent 401(k) retirement investment plan, you may want to roll over all your funds.  This also makes sense if you switch jobs often and want all of your money in one place. One downfall is you may have to wait until you become eligible to enroll in your new employer’s program.
  • Another option is to open an Individual Retirement Account or IRA. This can be a great option because it is done on your own accord through the financial institution of your choice. Your possibilities are almost infinite, and you won’t have to worry about the status of your job, affecting your retirement funds.

Everyone has a different financial, employment, and retirement situation. So, while some of these options may work for others, they may not work for you. It is always best to talk with a trusted financial advisor before you make any decisions. But one conclusion should be clear – make sure you take care of your 401(k) and retirement funds!

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