How to Handle Your 401(k) When You Leave a Job or Retire?
As advisors, we often get asked “what should I do with my 401(k)?” The reason for this question is because most individuals will experience some type of transition throughout their careers. Some individuals leave their current employer and join a new one. Others, unfortunately, may face the hardship of being let go. Others, after enjoying a rewarding career, just retire. Regardless of the transition you face, you have four options for your 401(k): Keep it where it is in your existing plan. Roll it into the 401(k) at your new employer (if allowed). Roll it into an Individual Retirement Account (IRA). Cash it out, withdraw the funds. Let’s explore each option and what implications they have on the choice. Keep it Where it is To start, keeping your 401(k) where it is is pretty self-explanatory. It is the most common choice according to a recent study conducted by the Vanguard Group. The study found that investors who separated from their employers in 2018 were more like...