The decision on what to do with your retirement money — like a 401(k), 403(b) or similar plan — once you leave your job is one of the most important retirement decisions you’ll ever make. A lot of people mistakenly think that this is an easy choice, but that’s rarely the case.
Dependent upon your particular situation, you may have up to six (yes, six!) different options to choose from. You may be able to:
- Leave your money in your employer plan.
- Rollover your plan assets to a new company retirement plan.
- Rollover your plan assets to an IRA.
- Take a lump-sum distribution of your plan balance.
- Convert your plan assets to a Roth IRA.
- Make an in-plan Roth conversion of your plan assets.
In some cases, you may be able to combine some of the options listed above. For example, you might decide to convert some of your plan funds to a Roth IRA and roll the rest over to a traditional IRA.
You’ll want to evaluate all six of these options with respect to fees and expenses, investment options, access to your funds, creditor protection, service and estate planning. Once you decide which option is best for you, you have to decide how to begin.
In general, there are two ways to move retirement money from your plan to another retirement account. You can either move it indirectly, which is what’s known as a 60-day rollover. Or you can move it right from your plan to a new retirement account, which is known as a direct rollover. A direct rollover is generally the best way to move money.
If you have any questions regarding what the best option is for you, you’re welcome to schedule a complimentary consultation with our advisors.
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