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Reasons to Roll Over Your 401k to an IRA

Written by Carolina Wealth Management.

If your money is still sitting in your previous employer’s 401k account, it’s time to move it into an account where you can control the fees and investment choices instead of letting your old employer make those decisions.

Why Roll Over?

Rolling over your previous employer’s 401k account into a single IRA is the only way to make sure that your portfolio account will follow proven investing strategies such as asset allocation, diversification, control over investment fees, and have the ability to invest in the best performing investments for your personal situation.   And with an IRA rollover, you preserve all of the existing tax advantages of your 401k.  Here are some of the advantages to rolling over:

1. More and Better Investment Options

In an IRA, you can select your own investments. You won’t be limited to the funds and managers selected by your employer. Consider that the average 401k employer plan contains just 13 investment choices making it difficult, if not impossible, to achieve a diversified portfolio whereas an IRA can give you access to thousands of investments, including stocks, bonds, and mutual funds.

2. Lower Fees

Some 401k plans are loaded with hidden fees, including administrative, insurance and management costs.  These fees represent money that is being wasted and worse, this money isn’t being used to fund your investments. Most IRA rollover accounts do not have any administrative or insurances fees associated with them and this represents an immediate savings to your portfolio.

3. Easier Account Management

With your retirement money earned from prior jobs in a single place, you’ll be able to see whether you are on track for retirement, without having to check multiple accounts.  You can obtain daily account valuations and you will be able to track the performance of your account.

4. Greater Control and Flexibility

Combining your 401k account(s) into an IRA will allow you to have control over your retirement plan.  You can choose to manage the account on your own or hire an advisor for help.  As long as you do not purchase an annuity based product or hire a broker that charges back end fees, you will have flexibility to move your account at anytime if you become unhappy with the portfolio.

Rolling over your 401k to an IRA Rollover account can have a positive impact on your retirement plan.  However, make sure you seek advice from a trusted resource before making a decision.

Need Help Rolling Your 401k Plan into an IRA?

Carolina Wealth Management can help guide you through this important process.   We specialize in helping our clients transfer their 401(k) accounts into an IRA rollover to maximize their savings opportunity.  We educate each client on proper diversification strategies, reducing fees, minimizing risks, and avoiding tax implications.  We design prudent investment strategies and tailor portfolios to our clients needs.  For more information, contact David Damm at 252-439-1344.

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