Transcript: Roll over Your 401(k) to an IRA
When I decided to leave nursing and stay home with my baby, rolling my 401(k) from the hospital’s plan where I worked into an IRA ended up being the best decision for me. It was simple, you know. And, simple is great when you’re dealing with 3 a.m. feedings.
I mean there are multiple options for your retirement plan assets and each of them has advantages and disadvantages, different investment options, fees, expenses – you really need to understand your choices. But rolling my plan into an IRA made sense for my new life. Other Options Include:
- Leaving assets in your former employer’s plan
- Moving assets to your new employer’s plan
- And, cashing out or taking a lump-sum distribution
For one thing, rolling into an IRA gave me more investment choices than I had in my 401(k). That was important for me. Plus, we file a joint tax return. So even though I’m not working, I can still make contributions to the IRA.
So during naps or after a bedtime story, I have time to take control of my retirement account and create a solid investment plan to match my goals. So from his baby steps to borrowing the car and beyond, my assets can potentially grow over time with tax advantages.
A IRA rollover puts my retirement assets in one place and can also help my beneficiaries.
And speaking of the future – my IRA allows me to take out money without penalty for major expenses like college tuition – though that’s a long way off.
You can consider taking penalty-free distributions for:
- Qualified higher education expenses
- Conversion to a Roth IRA
- Death or disability
- Health insurance premiums paid by certain unemployed individuals
- Also, qualified first time home buyers can take a maximum of $10,000
Of course, you have your own unique needs, so you should evaluate all your options to figure out the best plan for your retirement plan savings. Wells Fargo is who I talked to. They listened and provided the education I wanted.