If you were recently laid off or are leaving your current job, you’re likely now wondering what to do with the 401(k) you had with your employer. The answer? It depends. Independent financial advisor Mike Reeves of Strategic Wealth Designers joined the newscast to discuss what the next steps are. The first thing you have to decide is where you want your money.
“If you had less than $5,000, you might not have a choice and your company could automatically move it into an IRA,” Reeves says. “If you had more than $5,000 in the plan, you have more options. If you are still working, you can possibly move it to your new employer. But this might not be the best option. You should consider the benefits of a Roth IRA or traditional IRA.”
It sounds convenient for you to just leave the money where it is. But there are many disadvantages associated with this option. You can no longer contribute to the plan and there may be fewer withdrawal options. Additionally, if the company where to end up in a lawsuit, your money may be tied up for a portion of time.
“IRAs are a good option because of the options they provide,” Reeves says. “You have more choices about what your money is invested in than an employer plan. You also may be able to save on fees. Withdrawals are also more flexible.”
While it may take a little bit of effort to move your dormant funds, it could be much more beneficial for you to do so. To see additional stories surrounding business and economic news for the Indianapolis area, visit https://CBS4Indy.com/Strategic-Wealth and if you have a question for Mike send an email to firstname.lastname@example.org.