401(k) Rollovers

As your career takes new turns and you change jobs, you may find that you’ve left behind a 401(k) account with your previous employer. At BirdRock Wealth, we aim to assist with the various options available to you. However, it is advisable to consult a financial advisor before making any significant decisions. Here are a few potential options that you may consider:

1. You may choose to leave your 401(k) with your former employer.
2. You have the option to rollover your 401(k) to an IRA.
3. If allowed by your 401(k) plan, you can consider a partial rollover. 
4. In some cases, you may roll it over into your new employer’s plan.
5. You can also choose to cash out your 401(k); however, it’s important to note that you will be subject to taxes and penalties for an early withdrawal.

It is important to remember that rolling over a 401(k) to an IRA has both advantages and disadvantages. To help you evaluate your options, we have compiled a list of pros and cons for your consideration:

PROS

• Your retirement account can be professionally managed by a financial advisor if you choose to rollover to an IRA
• Generally, an IRA offers more investment options than a 401(k)
• Rolling over to an IRA can be less expensive than keeping your money in a 401(k)
• You can enjoy the convenience of having your retirement assets consolidated in one account
• Some financial advisors provide free financial planning services, including in-house tax and estate planning.

CONS

• IRA advisors may not be fiduciaries
• IRA fees may be higher compared to a 401(k)
• IRA investment options may be limited
• Your 401(k) may offer free financial planning services that an IRA advisor does not
• The investment performance of an IRA may not always match that of a professionally managed 401(k) 

If you are changing jobs or leaving a previous employer, it is important to consider what to do with your 401(k) plan. Our team is here to help you understand the options available to you, including rolling over the account to an IRA, doing a partial rollover, or keeping it with your former employer. We encourage you to speak with one of our experienced financial advisors to discuss your specific situation and create a plan that aligns with your long-term financial goals.