I’m starting a new job soon, which requires a lot of preparation to leave my old job. I’m wrapping up projects, saying goodbye to colleagues, and meeting with human resources to understand when my benefits will end. It’s a lot to wrap my head around but, even with so much going on, I had to remind myself not to forget about one other very important thing: my 401(k).
I can leave my 401(k) in my old employer’s plan until I’m able to start a new 401(k) with my new company. However, I recently learned that moving your 401(k) out of an old employer’s plan may not always be the best option for some workers. According to Daily Finance, some of the reasons you may want to leave your old 401(k) where it is include:
- Good performance. If you like the investment mix your former employer offers and have had success with its performance, you may not want to upset a good thing by moving your money.
- Affordable costs. When the fees required to manage your account are affordable for you, you may not want to move it.
- No fees for low balances. Since you won’t be contributing to your old 401(k) any longer, make sure your former employer won’t force you to move the account. If there’s no balance requirement, you can leave it where it is.
Personally, I would rather have all of my money in one account, where I can keep careful track of my retirement savings. If I don’t want to wait for 401(k) eligibility at my new job, I can open an IRA (individual retirement account) IRA to keep contributing and saving money uninterrupted.
If you think an IRA might be a good option for you, ask the professionals at your credit union how to open one. You’ll often enjoy excellent rates and dividends with a credit union IRA, which leads to more money in your nest egg for the future.