Dollars Making Sense

There are probably a lot of things going through your head when you change jobs. Here are some things to think about when trying to decide what to do with your 401(k).

There are a couple of options when it comes to your 401k and changing jobs.

1. Leave It With Your Former Employer – most plans allow you to leave your plan with the former employer after separation of service. Sometimes, if the account value is less than $1,000, they will force you to move the account.

Benefits: Can keep your current investments and it is usually pretty cheap to keep the account there

Cons: You only have access to the investments in the plan and will have multiple logins and accounts

2. Roll It Over to Your New Employer – If you have switched jobs, your new employer will most likely have a 401k option as part of your benefits. However, there is usually a time worked requirement to open a 401k with an employer, so if you do this option, your accounts might not be consolidated right away.

Benefits: You will have new investments to choose from, it is usually pretty cheap to open a 401k, and you will only have one account to keep up with

Cons: You only have access to the investments in the new plan

3. Roll It Over into an IRA - If you're not moving to a new employer, or your new employer doesn't offer a retirement plan, you can roll it into an IRA. This is opening an account on your own that is separate from your employers.

Benefits: You will have the freedom to invest how you want to and to invest in what you want to invest in (mostly)

Cons: If you are in a lawsuit, you will lose some creditor protection that a 401k gives you

No matter what you do in the situation, choose what makes the most sense for you.

Anyone else ever feel this way on a Monday after you put fresh sheets on your bed, your room is juuuust the right temperature and you think you're late for work??