Basics of 401k Rollovers
Although the economy is recovering, the market still feels volatile. If you are in the position of doing a 401k rollover, you could be thinking that this is the worst time possible to be moving money. On the other hand, there could be no better time to be the shepherd of your retirement fund. Wall Street has its ups and downs, seemingly daily, and the faceless people in charge of your 401k fund will not care as much as you do. It is not that they are trying to do a bad job, but who cares more than you about your money?
You have spent years contributing to your 401k, now that you need to make a change, don’t undo those years of hard work. It is tempting, when contemplating a 401k rollover to decide to cash out. Much better that you roll it to your new 401k account, or if you have lost your job like so many people, put it into an IRA.
If you are lucky enough to be switching jobs, put the money back to work for you by doing a straight forward rollover 401k. The fee structure will be the lowest available to you. The money you contribute will come out pre-tax and you are probably eligible for matching contributions from your employer.
As I said, if you are in the sad position of losing your job, you have to put the money somewhere and you should pick an IRA brokerage. Do some research on fees and funds available at various firms. One of the nice things about a 401k rollover-IRA is that you have a lot more control over your money. You, not some fund manager in New York, will be in control of where your money goes. Do you believe in investing in gold? With an IRA you can make that part of your portfolio (Never put all of your money into a commodity like gold).
Whatever your situation, protect your retirement nest egg with a little bit of research and planning. Once you know the basics of a 401k rollover, you are in control of your money and your future.
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