Zenith Wealth Partners

Old 401k? Now What?

Alli Masoero, CFP® – Zenith Lead Financial Planner 
Not Rich, Yet: A blog talking about finance in a way you’ll actually understand.

I recently had a friend text me “Yo, I have this old 401k and I have no idea where it is. Did I lose all that money?”.

With folks changing jobs more frequently, we accumulate 401ks (I hope) at each employer. Next thing you know, you have four 401ks and no idea what to do with them. To answer my friend’s question, no, that money is not gone. 

Here are a few facts about an old 401k:

  • Even though you are no longer working for the company, your 401k will stay with their custodian until you move it.
  • The old company will never pester you to move it. Unless you proactively do something about it, it will stay there ‘forever’.

You have three choices with an 401k roll-over:

  1. Keep it with your current employer
  2. Roll it to your new employer 
  3. Roll it into an IRA 

The option with the greatest flexibility is to roll your assets into an IRA; however, this may not always be the best solution for you.

There are pros and cons for all of the choices with immediate and long-term implications layered on. Expanded investment options, potential tax bills, and losing creditor protection are just a few examples. If I were to list all of the deciding factors in this decision you may be reading a 3 paged document instead of one.

The money is not gone… Please be patient. Seek out professional advice to make sure it is managed properly.

See you soon!

 

All written content is for information purposes only. Opinions expressed herein are solely those of Zenith, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

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