Consolidating 401 k accounts

Rated 3.86/5 based on 711 customer reviews

With a 401(k), your company’s administrator runs the plan, choosing which mutual funds and other investments are available, and setting rules about withdrawals. You can hold your IRA at a bank; a brokerage, like Merrill Lynch or Fidelity; or an online advisor, like Betterment.

The big advantage of a 401(k) is the company match—if you have one—and the automatic deductions made from your paycheck.

The mutual funds inside your 401(k) or your IRA come with their own price tags, too.

Ask your 401(k) plan administrator to break out the fees for you and compare them to what you would pay on the funds you buy in your IRA.

Some plans allow you to borrow against the money in your plan.

In an emergency, this could be a good alternative to taking a taxable distribution.

Some 401(k)s also have higher protections against creditors if you declare bankruptcy.

If you want more active counseling on your investments, your options will change. Many brokerages have advisors that you can call, but if you want more complete financial advice, you may need to hire a financial planner.You usually have three options: For most people, it makes sense to do a rollover of your 401(k) plan into an IRA, so that you can save money on fees and get access to a greater variety of investments.First, it’s important to understand the difference between a 401(k) and an IRA.If you are younger, you should consider setting a rollover strategy.Americans change jobs about 11 times over their careers.

Leave a Reply