Special Episodes

Rolling Over Your 401(k) Into An IRA

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Last week we started the conversation on finding the best way for you to invest for retirement. Today we’ll talk a bit about rolling over your old 401(k) into an IRA.

Why Rolling Over Your 401(k) Makes Sense

There are a few reasons that make rolling over your retirement money a financially smart move.

  • More Control: One complaint some people have with 401(k) is that they can only choose what is available in the employer plan.
  • More Choices: Tied with control, you generally also have more choices with an IRA. You can rollover your account with a ton of providers including brokerage firms, online discount brokerages, banks, mutual fund companies, and robo-advisors.
  • Lower Costs: Reviewing my husband’s 401(k) plans, I’ve noticed that the mutual funds selected aren’t the cheapest. They are actively managed and have fees associated with purchasing them. Having an IRA can allow you to find lower cost funds.

Simplify: I’ve seen people move their money to also consolidate their account, but usually it’s simply cutting down accounts and using the best one they currently have.

Where to Rollover Your Old 401(k)

For those looking at moving their money, the good news is that you have plenty of provider who would love to have your account.

There are a few thing you’d probably want to keep in mind when looking for a provider:

  • Solid Reputation: Is this a brand who is known for their dependability and outstanding customer service?
  • Account Fees: Do they charge an annual fee to maintain your account? Are there minimum investments and or contributions you need to make to avoid these fees?
  • Investment Fees: Even if you go with index funds, double check to make sure your provider are competitive with their charges.

I definitely like Vanguard and Betterment as places to invest your IRA contributions. They are both some great no hassle, low cost options that make it simple to invest in your future.

Want More Information on Bettterment? Read How to Set Up Your IRA in 20 Minutes or Sign Up and Open an Account.

No matter whomever you choose, just check in enough to make sure they are treating you and your money with respect.

If you have a provider you’d like to give a shout out to, please share them in the comments below, I’d love to get the word out on companies treating their customers right.

Until next time, take care!

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