Changing Jobs? What About Your Retirement Account?

Filed under: Financial tips

Senior businessman portraitYou might have watched your parents or grandparents retire after a long career with a single company. But these days, it’s rare for workers to stay put for twenty, thirty, or more years. We tend to change jobs, seeking upward mobility in our careers, or because we want (or need) to relocate. In many cases, a career change is a positive decision that opens more doors in the future.

But when you leave a job behind for greener pastures, what should you do about your old retirement account? You’ve been faithfully making contributions and enjoy the tax advantages for a few years, and now you’ve accumulated a nice chunk of change. Deciding what to do with that fund is a big decision, but your choices basically boil down to four paths:

  • Take the money as a cash distribution
  • Leave the money right where it is, in your former employer’s retirement plan (if allowed)
  • Roll the money into your new retirement plan (if allowed by the new employer’s fund)
  • Roll the money into an Individual Retirement Account (IRA)

First of all, that first option is usually a bad idea. You’ll probably trigger a 10 percent tax penalty if you take a cash distribution, so this decision could end up costing you a lot of money. Of course, the main problem with this decision is that you will cost yourself time (planning for retirement) that you can never get back.

So, in most cases, you will choose to either leave the money where it is, or roll it into your new fund or an IRA. The rules of your old fund, or your new one, might make this decision for you. Otherwise, seeking professional guidance is a good idea at this time. Give us a call, and we can help you figure out the most beneficial way to preserve your savings, while supporting your retirement goals.

If you would like more information or have specific questions, please contact us using the following form. We would be happy to assist you.

This information has been provided by a licensed insurance professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting the insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax, trust and estate, or investment advice. Infinite Wealth Advisors is not an investment advisory firm.  Investment Advisory Services provided by NAMCOA® – Naples Asset Management Company®, LLC, a federally registered investment advisor, website: .