401(k)’s make up a large percentage of many people’s retirement savings. These days, it’s not uncommon to change jobs several times over ones career, which can potentially mean having 401(k)’s scattered across different companies, in danger of being forgotten or invested improperly. Read below to see if rolling over your old 401(k) will benefit you.
Is the plan well-managed and meeting your needs?
Many clients answer this question with “I don’t know”. If that’s your answer as well, you should consider referencing your “Plan Summary Document” and your 401(k) statements to see what it is currently invested in, the fees associated with it, and the quality of your investment choices. Often times, clients believe old 401(k)’s to be have low or no costs, while in reality they can be very, very expensive.
Regardless of your answer above, it would be beneficial to check your 401(k)’s plan documents to see if it might be cost effective to rollover your old plan into an IRA. Even if the 401(k) meets your investment objectives and is low cost, it may be better to roll it over. Having separate 401(k)’s means you have to make sure to take Required Minimum Distributions, which clients overlook. If these aren’t taken, it can mean a large tax penalty. Check out this flowchart to learn more.
If you would like to schedule a call with us to talk about a potential 401(k) rollover or other planning needs, please give us a call at 303-440-2906 or click here to schedule a time to speak with us.
Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail firstname.lastname@example.org.
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