March 2020 brought about changes to everyone’s lives, some more so than others. In the months that followed, we saw many businesses re-evaluate, restructure, and some, sadly, close. For employees that were suddenly without a job, they had questions about what to do with their old 401k accounts. We received many phone calls from clients asking what their options were for these types of retirement plans. While no two plans are the same, here are some general guidelines on options that may help ease this worry:
- Leave the account where it is. Unless your plan is being terminated (where the employer may close their doors, and thus their retirement plan), many retirement plans allow employees with account balances greater than $5,000 to leave their accounts where they are.
- Transfer the balance into your new employee retirement plan. For those that were fortunate to find new jobs, many retirement plans will allow new employees to roll their old retirement plan balances into their new retirement plan. There are some stipulations limiting the types of retirement accounts that can roll over like this, so check with your new employer. But many clients choose this option as a way to aggregate their accounts.
- Rollover into an IRA. Some clients want greater control over their accounts or may want to have broader investment options to choose from. For those people, an IRA rollover might be a good option.
There are pros and cons to each of these options, and those often depend upon your circumstances, such as how old you are and what your income needs are. Our financial professionals can help evaluate your situation and offer recommendations that best fit your needs. If you need help understanding your options for your retirement account, give Hovis & Associates a call to set up a meeting. Our advisors are here to help at (800) 411-0737.