Today, employees are switching jobs at an increasing rate. It used to be that individuals would work at the same employer for 40+ years before retiring. Nowadays, that same feat is not only rare, but unheard of in the current job market. As a result of switching jobs more frequently, there are more and more employees who are in need of rolling over their 401k plans with their former employer. As I have been considering leaving my day job in the next couple years, I anticipate having to do this same process myself. It may seem like just another task to tie up your free time, but it is an important thing to consider.
Do you have a 401k plan that is still with your former employer? If so, you may be overlooking an important step in responsibly managing your finances. Making the decision to roll over a 401k to an IRA is not only a great way to minimize your fees, but is also an easy way to keep track of your retirement funds. Rolling your 401k over is a common transaction. In 2010 alone, approximately 11 million 401k rollovers took place. While that may seem like a lot, FiPath estimates the number of individuals who still have money in a 401k plan at their former employer is nearly double that figure. As a result of the high demand, they have established an express rollover center that deserves attention.
Why You Should Consider Rolling Over Your 401k
While 401k plans can be a beneficial investment tool when accompanied by matching contributions from the employer, it isn’t the best place to leave your investments. One of the biggest reasons why individuals choose to perform 401k to IRA rollovers is to limit the fees. Employer 401ks are known for not having the lowest fees. While you every plan is different, I have heard horror stories of some 401k plans charging hundreds of dollars in management fees each year. The savings in fees alone makes the time that is required to roll over your 401k well worth it.
Beyond avoiding fees, there are many other reasons why someone would roll over their 401k into an IRA. For example, lower fees often mean a higher rate of return. While nothing is guaranteed, this could mean the difference of thousands of dollars by the time your retire. Another benefit is that an IRA offers the employee complete control of their funds and allows you to sleep easy knowing that you have complete control of your investment.
Why You Should Consider FiPath
If you are wondering how to go about rolling over your 401k into an IRA, you might want to consider using FiPath’s Express Rollover Center. I know from experience that this process may sound confusing, but with their express center, they clear up all of your questions with an easy-to-use tool. Their rollover recommendation tool helps you compare the fees and gives you the option of either finding a financial advisor that can help you or using a financial services firm, which will save you money and reduce fees with the transaction. On top of that, they make it clear to the user which firm will best meet your needs by breaking down and comparing the costs, products, account minimums of the firms.
FiPath not only seems to offer a comprehensive service that makes it easy for both the experienced and novice investors, but they have a track history to back it up. Since being founded in 2008, they have already helped more than 90,000 users with various services. Don’t lose track of your investments. If you have money invested in a 401k at your previous employer, consider rolling it over to an IRA.