Podcast Episode 383: Are You Sitting on Forgotten 401(k) Money?
As life gets busy, it’s not uncommon to lose track of old financial accounts, especially if you’ve switched jobs multiple times. When someone leaves an employer, that old 401(k) will stay where it is unless you do something with it and it’s easy to forget about. But did you know that rediscovering this “found money” could significantly impact your financial future? In the latest episode of the Money Wisdom podcast, Jake Doser, CFP®, CPWA® and Nicholas J. Colantuono, CFP® share guidance to anyone who has ever stumbled upon an old 401(k).
This topic came from a question we received from someone who was informed their old 401(k) plan is moving to a new platform, but they had forgotten all about it. If you find yourself in this situation and come across an old account, what should you do, if anything?
Let’s start with why you want to take control of such accounts by rolling them over into an Individual Retirement Account (IRA). This move not only consolidates your retirement savings but also provides you with greater control and flexibility over your investments.
One of the key advantages of an IRA, as highlighted in the podcast, is the ability to diversify your investment portfolio. Unlike 401(k)s, which often have limited investment options, IRAs offer a broader range of choices, allowing you to tailor your investments to your specific financial goals and risk tolerance. There are also potential pitfalls of leaving money with a former employer, such as the risk of being forced to take a taxable withdrawal if your 401(k) balance falls below a certain threshold.
But let’s not just focus on the benefits of rolling over a 401(k). Nick and Jake also explore scenarios where it might make sense to keep your money in a 401(k), such as when your old employer offers high-yield fixed interest accounts or if you’re planning to work past the age of 73, allowing you to defer required minimum distributions.
For those looking for more in-depth guidance on managing their 401(k), we offer a valuable resource: “The Ultimate 401(k) Guide.” This guide provides a comprehensive overview of the pros and cons of different retirement account options, helping you make informed decisions about your financial future.
Here’s what we discuss in this episode:
0:00 – Intro
1:56 – Forgotten 401(k)
6:08 – The Ultimate 401(k) Guide
7:07 – Why you might not want to move the money
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
-
Frequently Asked Social Security Questions
Almost every American is impacted by Social Security in some way, so it’s no wonder that it’s one of the most frequently asked topics in retirement planning. When and how you start taking benefits… -
Maximizing Your Social Security Income
Social Security can serve as a safety net for many retirees, sometimes acting as a primary source of income. However, the program is highly complex with over 500 ways to claim benefits. Even one o… -
How Much Money Can I Spend in Retirement?
“How much can my spouse and I realistically spend in retirement at age 62 with $1 million saved?” Today’s hypothetical couple is asking the very question that most pre-retirees ponder when gearing… -
What Should My Tax Plan Be at Age 65 with $1 Million?
Approaching retirement with $1 million saved is an impressive milestone, but turning those savings into a sustainable income stream requires careful planning. At age 65, many retirees face the cha… -
What to Consider Before Moving in Retirement
If you have the liberty to relocate in retirement, does that mean you should? Maybe you’re a snowbird who wants to live down South full-time, or maybe you want to stick it out in the cold and spen… -
Dodging the Tax Torpedo
When envisioning the next chapter of your life, the impact of taxes can often be overlooked or forgotten altogether. The reality is, without the proper planning, you may be at the mercy of an impe… -
What Habits Should I Unlearn Before I Retire?
Today’s insightful question explores the behavioral finance side of retirement planning – specifically, which financial habits you should leave in the rearview as you transition into retirement. … -
How Can You Understand and Improve Your Credit Score?
In retirement, your credit score is still relevant in achieving and maintaining financial independence. The question is, how can you best understand and improve your score to reap the benefits of … -
RMDs and You
Tax-deferred retirement accounts like IRAs and 401(k)s have allowed your savings to grow without any immediate tax burden. However, once you reach a certain age, the IRS requires you to begin maki… -
How to Financially Plan for a New Presidential Administration
A new presidential administration is set to take office next year, and while there are a lot of uncertainties around what a second Trump term could bring, it’s important to stay the course in your…
