When you change jobs, you have different options regarding your 401(k). You can keep it at the old employer, roll it into a new 401(k), or roll it into your own IRA. How do you know which option to choose? Joe and Al give you the information you need to make the right decision. Find out how fees and costs affect your decision as well as the pros and cons of each option.
2:44 “By rock, should you keep it in your 401(k)? And by rolling, do you want to roll it to an IRA or roll it to another 401(k)?”
3:21 “A lot of advisors out there will tell you hands down that you should always roll it to an IRA, and that’s not necessarily true in each case”
4:58 “If you work for a larger employer, the fees and the costs of those funds inside those potential 401(k) plans might be lower than what you can get on the retail channel”
8:52 “You can’t avoid your required minimum distribution by rolling to an IRA”
10:08 “If you’re retiring younger, you might actually want to keep it in the 401(k) because you can take that money out at age 55 if you’re terminated from service without penalty you still pay taxes on it and then it’s investment choices…maybe you want to have all your assets in one place”
10:35 “IRA rules are more flexible at your death than 401(k) rules in regards to stretching out the tax liability”
13:13 “Did you know that with a regular IRA you have to wait until 59 ½ to take the money out without penalty, and with a 401(k) you can pull that money out at age 55 without penalty?”
18:43 “As long as you’re married to someone who has earned income, you potentially can contribute to a Roth IRA. Make sure you take advantage of that. If you’re not working and your spouse is, as long as there’s income in the household and you qualify, make sure you take advantage of it because we see that missed quite a bit”
20:21 “Take a look at net unrealized appreciation if you do have highly appreciated company stock inside your 401(k) plan, it’s a big tax deal”
22:44 “With any type of retirement account, just remember it’s separate property; it’s never joint. So when you pass away, of course your spouse would inherit that, but it’s never a joint account”
