What Is 401k?
It’s commonly known as a “defined contribution” retirement plan. These are offered by many employers to their full time employees. Employees contribute a percent of their pre-taxed paycheck into their employer's 401k plan. This percent of income you contribute is the “defined contribution” amount. The company may deposit matching amount of money, or more into your 401k account, although the company is not required to deposit any additional money. For more details on how your 401k or 403b works call me for a no-fee consultation.
When And Why Should I Rollover My 401k?
WHY: To keep control of your account and the cost of your account. Your former employer(s) will continue to have control over your retirement savings and the investments they are in. As a former employee, in most cases, fees on your investments will increase. Also investment choices may change which you will have no control over.
WHEN: You need to keep control. Rollover your 401k or pension as soon as you can. Many companies will allow you to rollover your 401k even before you retire from their company. If you have multiple retirement savings account with several former employees, you would be wise to consolidate them into one.
WHEN: You need to keep control. Rollover your 401k or pension as soon as you can. Many companies will allow you to rollover your 401k even before you retire from their company. If you have multiple retirement savings account with several former employees, you would be wise to consolidate them into one.