Understanding Your Options With Your 401(k)
When you make the decision to change jobs, the way the transition will affect your finances is a major factor in your considerations. While you likely are accepting the new position because it pays more, offers better benefits, or will improve your quality of life in another way, you may be wondering what to do about the financial situation you are leaving behind at your old job. Specifically, what do you do with your 401(k)?
To help you best most forward, here are your options.
- Take It With You: If both your previous employer and your new employer allow it, you will have the option to transfer your existing 401(k) to your new company’s plan. This will allow you to keep all of your retirement funds consolidated and will help you take advantage of continued contributions and employer matching.
- Leave It Behind: In some cases, you will be able to leave your 401(k) with your old employer. While you will not be able to make any more contributions, you can keep your money in a stable account that yields strong returns in this scenario. Usually, you will be able to move the money in the 401(k) at a later date should you choose to do so.
- Convert It: Finally, if you cannot leave your 401(k) or transfer it to your new company, you can roll the money over into an IRA. Just bear in mind that if you do not have your previous employer directly roll the funds over into the IRA and you have your 401(k) paid out to you, you only have 60 days to put that money into an IRA. If you wait too long, you will face tax implications.
Another key aspect of safeguarding yourself financially is carrying insurance coverage to avoid a costly and unexpected expense. Contact The Misner Agency for all of your insurance needs. We operate in Bloomingburg, Livingston Manor, Westtown, and Woodbourne, New York.