4 Reasons to Rollover Your 401(k)
At Johnson Brunetti, we understand that a 401(k) is one of the most significant assets Americans have when planning for retirement. That’s why it’s essential to explore your options and ensure you’re making the most of your retirement savings. David Shapiro shares his insights on Better Money Boston.
What is a Rollover?
Once you reach the age of 59½, you have the option to roll over your 401(k) into an Individual Retirement Account (IRA), even if you’re still employed. If you’ve changed jobs, this option gives you greater control over your retirement savings.
Why Consider a Rollover?
1. Increased Investment Choices: Most 401(k) plans limit your investment options to a select few mutual funds. By rolling over to an IRA, you can choose from a broader range of investments, including individual stocks, bonds, mutual funds, and exchange-traded funds (ETFs). This flexibility can be crucial as you approach retirement and seek to optimize your portfolio for growth.
2. Lower Fees: Many people are surprised to discover the high fees associated with their 401(k) plans, including investment fees, plan fees, and administrative costs. By rolling over, you could potentially achieve the same investment performance while minimizing or eliminating these fees, thus maximizing your retirement savings.
3. Professional Management: When you call your 401(k) provider, you often get a call center representative who may not understand your unique financial situation. In contrast, an IRA can provide you with access to professional management that prioritizes your best interests, ensuring your investments are aligned with your financial goals.
4. Tax Advantages: Considering a Roth conversion may also be beneficial for some. Although you would pay taxes on the converted amount now, the money can grow tax-free, offering potential tax-free withdrawals in retirement. This strategy isn’t suitable for everyone, but it could be advantageous depending on your circumstances.
The Power of Regular Check-Ins
In conclusion, regularly visiting with your financial advisor is crucial for navigating these important financial decisions. Their guidance can help ensure that you’re well-informed and on track to meet your financial goals. Make it a priority to maintain that relationship for a brighter financial future.
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
Related Resources
-
Today’s Retirement Reality
Almost one-third of Americans lack confidence that they will have enough income to cover basic monthly expenses throughout retirement. As the economic landscape continues to shift, more individual… -
How to Prepare for Taxes in Retirement
No matter how well you’ve saved for retirement, taxes are an unavoidable part of the process. The good news is that with the proper tax planning, you can minimize this burden and keep more of what… -
What Are Some Unexpected Retirement Expenses to Look Out For?
Today’s question is one we help our clients navigate all the time: What expenses might I be responsible for as I enter retirement? Nicholas J. Colantuono, CFP® joins this week’s Money Wisdom Qu… -
Essential Steps for a Robust Estate Plan
When planning for retirement, one crucial element that often gets overlooked is estate planning. Creating an estate plan can ensure that your assets, legacy, and loved ones are protected. While es… -
Will I Have Enough Income to Retire?
Once you’ve reached the retirement mountaintop, you may be uncertain about how to navigate the descent. Have you saved enough? Will your money last as long as you do? If you’re like most of the pe… -
Preparing for Retirement? Have a Plan for Taxes
Effective tax planning requires a proactive approach for today’s pre-retirees, as neglecting this crucial step can result in a significant tax bill later on. To help minimize your overall tax burd… -
Answers to Key Social Security Questions
The decisions you make about Social Security can have lasting implications, which is why it’s important to get your questions answered sooner rather than later. If you’re unsure about how to maxim… -
The Right Order to Build Your Financial House
You wouldn’t design a house that leaves you exposed to outside elements, so why do the same when building your financial house? A well-constructed house first and foremost needs a strong foundatio… -
Identity Theft: What to Do If Your Identity Is Stolen
In the digital age, the threat of identity theft is at an all-time high. Sophisticated cybercrime tactics and schemes have left us more vulnerable to online scams than ever before. So, what can… -
Don’t Let Taxes Derail Your Financial Plan
A retirement plan that doesn’t consider the impact of taxes can only get you so far. Implementing tax-efficient strategies early on is critical to lowering your lifetime tax liability. After all, …
