If you have an old 401k account from a previous employer, you might be wondering what to do with it. There are several options available to you, each with its own pros and cons. Here are some of the most common ones: – Leave it where it is. This might be a good option if you are happy with the investment choices and fees of your old plan. However, you won’t be able to make any new contributions to it, and you might lose track of it over time. – Roll it over to your new employer’s plan. This might be a good option if you want to consolidate your retirement savings and simplify your management. You will also be able to make new contributions to your new plan. However, you will have to follow the rules and fees of your new plan, which might not be as favorable as your old one. You will also have to check if your new plan accepts rollovers from other plans. – Roll it over to an IRA. This might be a good option if you want more control and flexibility over your investment choices and fees. You will also be able to make new contributions to your IRA, up to the annual limit. However, you will have to open an IRA account. Your Financial advisor or the team here at Robinswood can help you do this while exploring your plans for the future. – Cash it out. This is usually a bad option unless you have an urgent financial need. You will have to pay income taxes and penalties (10%) on the entire amount, which could reduce your savings significantly. You will also lose the opportunity to grow your money tax-deferred for retirement. As you can see, there is no one-size-fits-all answer to what you should do with your old 401k. You should consider your personal situation, goals, and preferences before deciding next steps. You should also consult a financial advisor if you need more guidance or advice.
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