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Is a 401(k) Rollover Right for Me?

A strategic 401(k) setup can mean being on track towards a comfortable retirement. But how do you know when to roll over your 401(k)s? What might the tax implications be? And how do you avoid potential penalties?

Whether a 401(k) rollover is right depends on your financial situation, goals, and preferences. Here are some factors to consider when deciding:

More Investment Options

IRAs typically offer a more comprehensive range of investment options than employer-sponsored 401(k) plans. If you prefer more control over your investments or want access to specific funds, a rollover to an IRA might be beneficial.

Asset Consolidation and Organization

If you have multiple retirement accounts from previous employers, consolidating them can simplify your financial life, making it easier to manage your investments.

Access to Funds

Do you need access to your funds before retirement? 401(k) plans may have different withdrawal rules than IRAs. Our team can determine which account structure best suits your potential needs.

Costs and Fees

Our fiduciaries can determine whether your 401(k) plans have higher fees and expenses than other options. If so, a rollover can reduce costs, leaving you with more money.

New Job

If you recently changed jobs or retired, roll over your 401(k) from your previous employer so you have more control over where your money is.

A 401(k) rollover is a great opportunity to reassess your financial plan. Consult with a Salt Lake City fiduciary for personalized advice about the potential implications of this financial move.

Should I Cash Out My 401(k)?

We recommend not cashing out a 401(k) unless you’ve actively explored every other option. Cashing out before you turn 59.5 means being on the hook for withdrawal penalties of 10+% as well as paying applicable income taxes.

Don’t make a rash decision you may regret later! Let our Salt Lake City team analyze your situation, making suggestions you might not have considered. Up against a financial emergency? We can help you navigate a withdrawal – including how it may potentially affect your retirement plans.

401(k) Rollovers in Salt Lake City:
FAQs

 

Pending complications, rollovers can typically be completed in 2-4 weeks.

Delays are often the result of plan restrictions, approval hold-ups, and paperwork errors. Our Salt Lake City fiduciaries work to ensure your rollover process is as smooth as possible.

Important Note: If employers are dealing with pending litigations, mergers, or administrative changes, they can freeze your 401(k). If this happens, they are required to give you a 30-day advance notice.

Furthermore, you might only be entitled to your entire 401(k) plan if you’re fully vested. We recommend checking your vesting schedule to learn more.

Acceptance of rollovers is at the employer’s discretion and is subject to the rules and policies outlined in their specific 401(k) plan documents. Some employers may welcome rollovers, while others may have restrictions or simply choose not to permit them.

A direct rollover involves transferring funds directly from your 401(k) to the new account without you handling the money. This is often preferable to an indirect rollover, where you receive the funds and have 60 days to deposit them into the new account to avoid taxes and penalties.

It’s worth noting that direct rollovers typically avoid immediate taxes, while indirect rollovers may result in withholding. And you may need to deposit the total amount to avoid taxes and penalties.

401(k) Rollovers for Salt Lake City

All this information may seem overwhelming, but it’s easier for Salt Lakers to navigate it all with a fiduciary. At Trajan Wealth, we can help you decide if a 401(k) rollover is right for you and how best to accomplish it. That way, you know your assets are in order.

Schedule an appointment at our Draper or Farmington location, or meet with us in a secure online space. We look forward to working with you.

Contact Us Today!