401K / IRA Rollover: Streamlining Retirement
A Way to Optimize Your Retirement
If you’re currently employed and gearing up for retirement, you’re among the 55 million American workers who have a 401(k) retirement account. Plans like the 401(k) allow employers, employees, or both to regularly make tax-deferred contributions—and they offer some latitude as to how you want to invest those funds, too.
A rollover is when you move funds from one eligible retirement plan to another, such as from a 401(k) to a Traditional IRA or Roth IRA. Rollover distributions are reported to the IRS and may be subject to federal income tax withholding.
As of the most recent data available, 401(k) plans account for approximately 20% of total retirement assets in the United States. To put that number into perspective, it’s the equivalent of Japan’s entire annual economic output as the world’s third-largest economy.
Don’t Leave Money Behind
Whether you’re switching jobs or ramping up for retirement, you might find yourself among those with a 401(k) and an uncertainty about what to do with it. Plus, if you’re a baby boomer—someone born between 1946 and 1964—you’re among the roughly 10,000 workers retiring per day.
12.5 million people with a defined contribution retirement plan like a 401(k) leave money behind every year after changing jobs or retiring, according to the Retirement Clearinghouse.
Why should I roll over my 401(k)?
The average American worker changes jobs an incredible 10 to 15 times in a lifetime, which means there is a good chance a 401(k) account is getting lost or left behind. According to the National Association of Unclaimed Property Administrators (NAUPA), there are billions of dollars in unclaimed retirement accounts, including old 401(k)s.
Now is the time to explore which rollover option is the best for you and how it will affect your lifestyle in retirement.
Understanding Rollovers
For most people, a 401(k) account is an easy way to grow their retirement savings with minimal effort. You decide what percentage of your salary to contribute each pay period—up to certain annual limits—and watch it earn interest over time.
But what happens to your 401(k) when you retire? And what if you change jobs? During our Money Discovery conversation, we'll help you determine if rolling over your 401(k) is the right move and guide you through the process. Once we've identified the best strategy, you can focus on what matters most, knowing your retirement savings are secure.
