TALLAHASSEE, FL -- In today’s world, it is very uncommon for an individual to work in one place for 20 or 30 years. It’s nothing for somebody to change jobs 3, 4, or 5 times throughout their career, but when that happens, you need to know your options on what to do with your 401(k).
On Monday's Midday, Stacy Bush shared four common options that you have.
1.The first one is to keep your 401(k) with your former employer. Some of them, but not all, allow you to keep your retirement savings in their plan after you leave.
2.The second option may be to roll the assets into an IRA. This bill gives your money the potential to grow tax-deferred as it did in the 401(k), but you often times have a wider variety of investment options available.
3.The third option is to consolidate your old 401(k) assets into a new employer’s plan. Not all the employees will accept a rollover from an old 401(k) so you will need to check with the plan administrator.
4.The fourth option, the worst option in my opinion, is to cash out your 401(k). If you take money out of this account before the age of 59 ½ you will be subject to ordinary income tax as well as a 10% early withdrawal penalty.
It’s very important to consider your options when making this decision.
