In the ever-changing job landscape, many Americans switch jobs multiple times. Amid this movement, important financial matters like handling your 401(k) can easily slip through the cracks. This article will address common missteps during 401(k) rollovers and offer insights for a smoother process.
Losing Track of Your 401(k)
With the average person having around 12 jobs in their lifetime, it’s no wonder that tracking retirement savings becomes a challenge. Changing jobs without moving your 401(k) funds can leave money stranded, causing loss of control, and missed investment opportunities.
Loss of Control and Insight
Leaving your 401(k) with a past employer gives their portfolio managers control over investment choices. Funds might shift between companies or end up as cash, limiting your ability to take advantage of market gains. Plus, many 401k plans provide a risk tolerance based on your age when you are contributing. If you have a 401k from when you were 25, the investment goals and risk tolerance change when you are in your 50’s.
Neglecting Expert Advice
Confusion or lack of knowledge often contribute to investors not rolling over a 401(k). Yet, with proper guidance, rolling over your retirement account can be straightforward. Trustworthy financial advisors, like Safe Harbor Retirement Group, can help you navigate complexities, prevent tax issues, and ensure a seamless transfer.
Premature Withdrawals
Taking out 401(k) funds before retirement age can impact your nest egg in the future. If you withdraw before 59 and a half, taxes and a 10% early withdrawal penalty are assessed. It’s vital to explore alternatives and consult with a financial advisor before tapping into your retirement savings for cash.
SafeHarbor Can Help With 401k Rollovers
If you are sitting on one or more 401k accounts that you are no longer contributing to, reach out to our team to discuss a 401k rollover. We will guide you through the steps to move your money to a suitable investment vehicle that aligns with your investment goals. Schedule a complimentary consultation today or call us at (614) 760-0670 to schedule an in-person meeting.