401(k) Rollovers

As you move in different directions on your professional path, you may be walking away from a 401(k) with your former firm. We want to provide you with the potential options you have with your former employer. As always, remember to talk to a financial professional before making any decisions. Here are some of your options: 

1. Keep the 401(k) with your former employer
2. Rollover the 401(k) to an IRA
3. Do a partial rollover if this is allowed by your 401(k) plan
4. Cash it out - Since a 401(k) is pre-tax dollars, you will pay taxes and penalty for an early withdrawal

Remember, there are pros and cons to rolling over a 401(k) to an IRA. Here's a list we've made for you with a few of the pros and cons: 

PROS

  • Can be professionally managed by a financial advisor
  • Generally, there are more investment options with an IRA
  • It may be less expensive than your 401(k)
  • Convenience of having your assets under one roof
  • Some advisors offer free financial planning, and they may include additional services like in-house tax planning and estate planning

CONS

  • IRA advisors may not be fiduciaries
  • May be more expensive than your 401(k)
  • Limited investment options
  • You may have free financial planning from your 401(k) that another firm does not offer
  • Investment performance may be as good as a professional

 

If you need help assessing your decision with your 401(k), Birdrock is here to answer your questions. 

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