Have you changed jobs or are you planning to retire?
The great thing about a 401k retirement savings plan is that most plans are portable when you leave a job.
So what should you do with your 401k?
The way your 401k plan works after you retire depends on what you do with it. You have several options, each with their own advantages and disadvantages. Review the chart below and consider your options carefully before making a decision. There are several factors to consider based on your personal circumstances and financial goals.
Keep in Mind
Any outstanding plan loan balances would need to be repaid prior to rolling over or you may incur income taxes and potentially a 10% tax penalty. Speak with our advisors about your options.
If you don't follow the 401k transfer rules you could end up with extra penalties and taxes. Work with your new employer's plan administrator on how to transfer the funds from your old 401k into the new plan. Speak with one of our advisors about your options.
If you have less than $5,000 in your account, you may be required to transfer your money out of that retirement plan, and if you have less than $1,000 in the account, your former employer will likely cut you a check for the appropriate amount. Speak with one of our advisors about your options.
The Coronavirus Aid, Relief and Economic Security Act, which allocates $2 trillion toward economic stimulus and relief in the wake of the coronavirus pandemic, includes several provisions that make it easier for those affected by the outbreak to access retirement funds. Speak with one of our advisors about your options.
Before deciding whether to retain assets in a 401(k) or roll over to an IRA, an investor should consider various factors including, but not limited to, investmentoptions, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession ofemployer stock. Please view the Investor Alerts section of the FINRA website for additional information.
Rules controlling what you can do with your 401(k) after retirement are very complicated, shaped both by the IRS and by the company that set up the plan. Capital Financial Solutions has the experience and a team of dedicated advisors that can guide you through your options.