What To Do With a 401(k) from a Previous Job

retirement account

The average American worker will change jobs 5-7 times throughout his or her career. This can sometimes lead to a menagerie of old retirement accounts that become too much to try to keep track of individually. It’s not uncommon for workers to forget their login credentials or forget about accounts altogether which can seriously derail their investment goals.

If you’ve left a former employer where you were investing into a 401(k) or other type of retirement plan, then you have a few options of what to do with it.

  1. Your former investing company may continue managing it for you.
  2. They might send you a check for the balance because it was either not enough for them to manage or other regulatory reasons. If you get a check from your former retirement plan, then you have 60 days to deposit it into another retirement account such as an IRA before having to pay penalties and taxes on it.
  3. You can roll it over somewhere else to either self-manage it or have a financial advisor manage it for you.  

It’s never a wise decision to spend retirement savings early, because not only will you pay taxes and penalties on it, but you will also miss out on the opportunity of the future gains on your investment. The best option would be for you to roll over your account to an IRA or Roth IRA with a financial advisor. Having all your money in one account versus several will keep your asset allocation on track and allow you to experience a broader and more tactical investing approach.

If you have any questions about how to proceed with your investing or you simply wish to learn more about how you can grow your wealth, give us a call at American Financial Planning to talk to one of our CERTIFIED FINANCIAL PLANNER™ professionals.