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Is It Time For Your Retirement Account To Move Too?

What are you going to do with your retirement money if you move employers? It’s good idea to plan for your employer sponsored plan like your 401ks, 403b, or 457 plans, before you move employers, even if it is voluntary.

You have several options:

Leaving your 401(k) alone. With this choice, you may have less of a say over those assets in the future. If the investment selections in your old 401(k) were good and the plan fees were low, you may not want to move the money. If fees were high and the investment roster was slim or subpar, a rollover might be a better option.

Take an early withdrawal. If you need money to pay off medical bills or debts, tapping your 401(k) might be more bearable than tapping other financial resources. Make no mistake: the withdrawal will be expensive. Distributions from a regular, non-Roth 401(k) are defined as taxable income by the Internal Revenue Service, and a 10% additional tax usually applies if you make a withdrawal prior to age 59½.1

Roll the money over into an IRA. A direct rollover is one way to accomplish this. Direct rollovers are not taxable events. Optionally, you can move the money again from the IRA into another qualified retirement plan. If the IRA has lower fees, great; if not, the rollover may not make sense, especially if you have company stock in your 401(k).2

Roll the money over into a new employer’s plan. Some employers allow this – but if the new workplace retirement plan has higher fees and fewer investment choices compared to your old plan, you might be better off leaving your savings where they were.

Let’s work through your choices together and see what makes sense for your financial picture and future. Regardless of your decision, we are here to help- Scarlet Oak Financial Services can be reached at 800.871.1219 or contact us here.

This material was prepared by MarketingPro, Inc. for use by Scarlet Oak Financial Services.


1 –, October 29, 2020

2 –, January 18, 2020

Advisory services offered through Capital Asset Advisory Services, LLC, a Registered Investment Advisor. This material has been prepared for informational purposes.