As a pre-retiree or retiree, you may be familiar with the 401K savings account. However, what you may not know is that this asset can be rolled into an individual retirement account (IRA) to provide more flexibility and control over key components of your retirement portfolio.
We will discuss the 6 reasons why it’s important to rollover your 401k into an IRA so that you can build a smarter and healthier financial future for yourself and your loved ones. We’ll help explain topics such as tax benefits, investment selection options, and avoiding penalties from early distributions; all while helping you make smarter decisions regarding where to save for retirement.
1. Access to more investment options – An IRA gives you access to a much wider selection of investments than a 401K
2. Lower fees and expenses – IRAs typically have lower fees and expenses than 401ks, meaning more savings in your pocket
3. Have all your investment accounts in one place- Easily rollover funds from multiple employers into one account
4. Working with a dedicated advisor- You will have a dedicated advisor instead of working with a random advisor when you call the 800 number
5. Easier estate planning – Rolling over your 401k to an IRA makes it easier to pass your retirement assets on to heirs
6. Benefit from qualified retirement plans – If you are self-employed or don’t have access to employer plans, rolling over into an IRA gives access to qualified plans like SEP IRAs or Solo 401(k)s
Access to more investment options – An IRA gives you access to a much wider selection of investments than a 401K
Individual Retirement Accounts (IRAs) are popular investment vehicles for people who want to save for retirement and enjoy tax benefits. One of the biggest advantages of IRAs is that they provide access to a wider range of investment options compared to 401K plans.
This means that IRA holders can diversify their portfolio and choose investment opportunities that suit their investment goals and risk tolerance. From stocks and bonds to mutual funds and exchange-traded funds (ETFs), IRAs offer flexibility and customized investment options that are tailored to individual needs.
By taking advantage of these diverse investment options, IRA holders can potentially earn higher returns and secure a better financial future for themselves.
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Lower fees and expenses – IRAs typically have lower fees and expenses than 401ks, meaning more savings in your pocket
When it comes to retirement savings, fees, and expenses can eat into your earned interest and cost you thousands over the years. That is why IRAs are a popular choice for individuals looking to maximize their retirement savings.
Not only do they offer flexibility with investment options, but they also typically have lower fees and expenses compared to 401ks. By choosing an IRA, you can keep more of your hard-earned money in your pocket, allowing it to grow and compound over time. This in turn translates to a larger retirement nest egg to enjoy when the time comes.
Have all your investment accounts in one place- Easily rollover funds from multiple employers into one account
Managing multiple investment accounts from different employers can be overwhelming and time-consuming, not to mention, keeping track of all the different statements and fees. By Rolling over your 401Ks into one IRA, you can simplify your investment management and gain a clearer understanding of your portfolio’s performance. Plus, with all your funds in one place, it’s easier to avoid overlap or gaps in your investment portfolio.
In addition, you will be working with a financial advisor who can help you make informed decisions and create a customized investment strategy that aligns with your goals. Start organizing your financial future by consolidating your investment accounts today.
Working with a dedicated advisor- You will have a dedicated advisor instead of a random advisor when you call the 800 number
Working with a dedicated advisor can provide numerous benefits over working with a random advisor when calling the 800 number. Not only can a dedicated advisor provide a personalized experience, but they also have a deeper understanding of your unique needs and preferences.
With a dedicated advisor, you’ll have access to more in-depth knowledge and expertise, allowing you to make more informed decisions about your finances or other important matters. Additionally, a dedicated advisor can help you navigate complex situations or identify potential problems before they become major issues.
Overall, having a dedicated advisor can help ease the stress and uncertainty that often comes with seeking assistance over the phone, and provide you with the confidence and peace of mind you need to move forward.
If you would like to find out how we can help you consolidate all your retirement accounts, click here to schedule a one-on-one 30-minute introductory meeting.
Easier estate planning – Rolling over your 401k to an IRA makes it easier to pass your retirement assets on to heirs
As we approach retirement age, the need for proper estate planning becomes increasingly important. Rolling over your 401k to an IRA can simplify the process and make it easier to pass on your retirement assets to your heirs.
By doing so, you can name your beneficiaries directly on the IRA account, making it easier for them to inherit your assets without going through the probate process. It’s a common misconception that estate planning is only for the wealthy, but it’s essential for anyone who wants to ensure their assets are distributed according to their wishes.
Proper estate planning is crucial in ensuring a smooth transfer of wealth to future generations, and rolling over your 401k to an IRA is a practical step towards achieving this goal.
Benefit from qualified retirement plans – If you are self-employed, rolling over into an IRA gives you access to qualified plans like SEP IRAs or Solo 401(k)
For those leaving a company and starting their own business, they can rollover their 401Ks into qualified plans like SEP IRAs and Solo 401(k)s, which are designed to help small business owners save for retirement without all the fees of large 401k plans. Rolling over into an Individual Retirement Account (IRA) can provide access to these kinds of plans.
While it may seem daunting to navigate the various options available, working with a financial advisor or retirement specialist can make the process much smoother. Doing so can help ensure that you take advantage of the incredible benefits these plans have to offer and set yourself up for a more secure financial future.
If you would more information on retirement accounts for small business owners, click here to schedule a one-on-one 30-minute introductory meeting.
In conclusion, rolling over your 401k to an IRA offers notable advantages that can greatly benefit your retirement savings. By transferring your funds to an IRA, you can access more investment options with lower fees and expenses.
Additionally, the convenience of having all your investments in one place, plus having access to a dedicated advisor, will lead to better financial outcomes. Furthermore, making this rollover will also facilitate estate planning and provide you with access to qualified retirement plans as well.
All these measures demonstrate how important it is for investors regardless of their age or income level to start thinking about retirement savings by considering an IRA rollover.
A plan participant leaving an employer typically has four options (and may engage in a combination of these options), each choice offering advantages and disadvantages. For balance, please update your material to include each option below:
• Leave the money in his/her former employer’s plan, if permitted;
• Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted;
• Roll over to an IRA; or
• Cash out the account value.
The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual. Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax. A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.