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Should you roll your old 401k to your new employer or to an IRA? What should you do with your 401k when you retire? Should you be doing anything different in your 401k?

Planning for retirement often comes with a lot of questions. Here to help make sense of it all is Alexander Joyce, President & CEO, ReJoyce Financial. Alexander says:

A 401k, 403b, 457 plan, and TSPs are wonderful tax-deferred forces to plan and fund retirement.  It is best when funding these retirement plans to act as if the money you are contributing to each pay period doesn’t even exist.

Among many benefits, some of the largest benefits are that these plans grow 100% tax-deferred.  Meaning you never pay taxes on your annual earnings. You only pay taxes when you choose to withdraw the money. A fun fact would be that the money you contribute to your tax-deferred retirement plan grows in the way of triple compounded interest. Your getting interest in your principal, interest on your interest, and interest on the money you would have paid taxes on.

Another very large advantage and an incentive to save is the matching contribution from your employer. Many employers match 100% up to the first 4. It is not unheard of for an employer to match much more than that. It is important to understand your retirement plan benefits. It is very common for individuals at any age to take the HR package and stick it in a drawer.  I recommend paying attention and reading this information. It is your money we are talking about and the better you understand the more likely you are to add an additional 0 or 2 to your retirement savings….

A lot of times individuals change jobs, possibly a couple of times. It’s more prominent now than ever. One of the questions we get often is what to do with the old 401k plan. Should you leave it at the old employer, roll it to the new employer, or transfer it to a Traditional IRA of your choosing. The answer is not black and white and can be a little complex. What you need to know is the availability of funds at the new employer, the custodian, the match from the employer, the expense, and other variables if they apply. As an Advisor, the biggest thing I would encourage is to seek advice if this something you’re unsure of. It doesn’t cost anything from our firm to give you advice as to the direction that is best for you.

On the other hand, individuals still struggle when forced with the decision of what to do with the 401k or other retirement plans when they retire. We believe when you retire or are planning to, this is when you need advice or an Advisor the most. It is imperative to seek professional fiduciary advice as to the direction, importance, and purpose planning for a sustainable long-lasting retirement. Seek a no-cost consultation at 317.903.9157 or visit our door is always open, we are here to help.

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