IRA/401K Rollover

For the most part, there is only one really good reason to contribute to a 401(k) plan and that is the free money you get from the employer match. Some companies will match up to 100% of your contributions.

When you retire, the free money ends so the number one reason for being in this plan in the first place goes away the moment you stop making contributions. Yet, you still have all the plan rules, guidelines, and limitations to deal with:

  • These can can restrict your access to your money
  • Your investment options are limited (some have as little as 13 mutual fund options)
  • Almost all of them include some market exposure
  • You have limited distribution flexibility for children and grandchildren because 401(k) plans don't offer the stretch option for them to continue with that tax deferral throughout their life expectancy

The Better Option: IRA Rollover

  • You can do a direct rollover from your current custodian to a new custodian which avoids the 20% mandatory withholding.
  • Your money continues to grow tax deferred
  • You control where the money is invested; You are no longer restricted by the limited options offered by most 401(K) plans
  • You have many more options to protect your money from the next market correction
  • IRA's offer the stretch option

If you have retirement assets from one or more employee-sponsored retirement plans (i.e., 401(k), 403(b), profit-sharing plans) to which you are no longer contributing:

  • If you have changed jobs
  • You are retiring soon
  • You are already retired

And are looking for:

  • Continued tax deferral
  • Continued growth potential
  • Protection from market losses
  • Guaranteed lifetime income
  • Ability to create a legacy