Why Is It Important To Rollover Your 401k

If you start a new job with a new company you are now faced with the task of what to do with your current retirement funds.  You have a few options such as leaving the investments with your previous employer, cashing out or rolling over to a new 401k or IRA.  While you should take the time to get 401k rollover info and weigh your options, today were going to talk about leaving your money where it is.

There are some benefits to leaving your current 401k savings where it is.  One reason to leave it with your previous employer is perhaps you like your previous companies investment options.   You may have looked over your new employers options and not find them up to par with what you currently have.  You can leave your investments in tack until you find a better solution.

Maybe you are just unsure of what your next move will be.  Rather than cashing out your 401k, which is certainly the last option you should choose, leaving your money with your current employer while you figure out your next investment options is a wise choice.  This way you avoid any penalties from cashing out and you do not face the 60 day window of reinvesting the money into a new account.

However, here are a few reasons as to why it is important to eventually rollover your retirement funds to a new account.  First off, depending on how many positions you have held over the years you do not want multiple 401k accounts all over the place. This makes it very hard to keep track of.  Secondly, you are no longer able to mak contributions to your old plan and you will not be able to take any loans against your 401k either.   You may also be responsible for paying any account maintenance fees.

While leaving your money with your previous employer is a good temporary solution, you should not make it a permanent one.

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