Is a 401(k) Rollover Worth It?

A 401(k) rollover occurs when a person directs the transfer of the money in their retirement account to a new plan or IRA. The most common period when people decide to rollover 401(k) is when they either change jobs or retire. One of the most substantial challenges in rolling over a 401(k) is deciding whether it’s a good idea for you. If you make a bad choice, you can end up facing some substantial obstacles like running out of funds and not being able to afford daily living expenses.


Options besides Rolling Over a 401(k)


One of the most important things about 401(k) rollover is understanding that it is not your only option. Besides a 401(k) rollover, some of the other options that you might consider include: directly rolling over a 401(k) to a new employer’s 401(k) or not transferring a 401(k) to an IRA but leaving the old 401(k) in place. The best estate planning advisors will be able to tell you what strategy will work best in your situation.


Reasons to Rollover a 401(k)


There are several reasons why it makes sense to rollover a 401(k), which most commonly include:


  • Unhappiness with how investment in the 401(k) is performing.
  • High costs and limited choices, which impact profits from the accounts.
  • Performing the proper type of rollover would lead to increased assets.
  • The plan limits your existing investment options.
  • You’ve located a better fiduciary advisor who can help make more rewarding choices.
  • Rolling over the 401(k) would lead to increased control and more access to assets.


Understanding reasons to rollover a 401(k) are not nearly as valuable, however, if you do not understand situations where a rollover does not make nearly as much sense.


Reasons to Think Twice about a 401(k) Rollover


Rolling over a 401(k) is not always the best idea. Some of the reasons why you should reconsider a 401(k) rollover include:


  • You already have an inexpensive plan that provides lots of control, and rolling over the 401(k) would save on neither costs nor increase control.
  • You are content with your financial advisor and already receive appropriate financial planning advice.
  • You’re content with the results you’ve seen with your 401(k) and rolling it over is unlikely to have better results.


While an advisor can help determine whether rolling over a 401(k) is right for you, finding an informed and helpful advisors can be challenging. Before deciding one way or another, it is a good idea with a professional who has helped others realize the most out of rolling over a 401(k).


Speak with an Experienced Estate Planning Attorney


401(k)s involve various complex laws. If you need assistance navigating this complex process, do not hesitate to speak with an experienced estate planning lawyer at Ettinger Estate Planning. We’ve helped many people achieve their estate planning goals and can make sure that your estate is administered in accordance with your wishes.

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