401(k) & Retirement Account Help • Waukon & Northeast Iowa

What Should I Do With My 401(k) When I Retire or Leave My Job?

Changing jobs or retiring often leaves you with an important financial decision: what should you do with the retirement account you built at your former employer?

You may have several choices. The right answer depends on your situation, your investments, costs, retirement plans and what you want the account to do next.

Let’s Look at Your Options

You Usually Have More Than One Choice

When you leave an employer, rolling your 401(k) into an IRA is not automatically the right answer. Before making a decision, it makes sense to understand all of the options available to you.

1. Leave It in Your Former Employer's Plan

Some employer retirement plans allow former employees to leave their money in the plan. Depending on the plan, this may provide access to attractive investments, institutional pricing or other features worth keeping.

2. Move It to a New Employer's Plan

If your new employer's retirement plan accepts incoming rollovers, combining your old account with your new plan may simplify your finances. Investment choices, fees and plan features should still be compared.

3. Roll It Into an IRA

An IRA may provide a broader range of investment choices and additional flexibility. It can also make it easier to coordinate the account with the rest of your retirement plan. Costs, services and protections can differ from an employer plan, however, so those differences matter.

4. Take the Money Out

You may also have the option to take a distribution. Depending on your age, account type and circumstances, taxes and possible penalties may apply. Understanding those consequences before taking the money can prevent an expensive surprise.

The Goal Isn't to “Do a Rollover.”

The goal is to figure out which option makes the most sense for you.

Sometimes leaving the account exactly where it is may make sense. Sometimes combining accounts helps. Sometimes an IRA offers features that better fit the larger retirement plan.

We would rather compare the choices first and make the decision second.

What Should You Compare?

Two retirement accounts can look similar on a statement while offering very different features. Before moving an old 401(k), some of the things worth reviewing include:

Investment options available in the existing plan
Investment options available through an IRA or new employer plan
Account and investment expenses
Advisory or management costs
Withdrawal rules
Access to professional advice and planning
Creditor protection
Loan provisions, if applicable
Beneficiary options
Required minimum distribution considerations
Whether you expect to retire soon
How the account fits with Social Security, pensions and other savings

Retiring? Your 401(k) Decision Is Only Part of the Picture.

When retirement is the reason you're leaving work, the bigger question often isn't simply where the account should be held.

It's how your retirement savings will eventually become income.

That means looking at the 401(k) alongside Social Security, pensions such as IPERS, other investment accounts, cash reserves, taxes and your expected retirement spending.

If you're approaching retirement, you can also learn more about our retirement planning process in Waukon and Northeast Iowa .

What If I Have Several Old 401(k)s?

It's common to accumulate retirement accounts from several employers over the course of a career.

Consolidating accounts can sometimes make investments, beneficiaries and retirement planning easier to manage. But consolidation isn't automatically better. An older plan may have investments, pricing or other features that are worth keeping.

We can lay the accounts next to each other and compare them before deciding whether anything should change.

401(k) Rollover Help in Waukon and Northeast Iowa

Heartland Wealth Partners works with individuals and families throughout Waukon and Northeast Iowa who are retiring, changing employers or trying to organize retirement accounts accumulated over a career.

You don't need to know whether you want an IRA, a rollover or any particular investment before scheduling a conversation.

Bring the statement. Bring the questions. We can start there.

Common 401(k) Rollover Questions

Do I have to move my 401(k) when I retire?

Not necessarily. Depending on the rules of your former employer's plan, you may be able to leave your account where it is. Moving the account should be a decision based on the available alternatives rather than something done automatically because you retired.

Can I roll my 401(k) into an IRA without paying taxes?

A properly completed rollover between eligible retirement accounts can generally be completed without creating current taxable income. The details matter, however, particularly when distributions are paid directly to the account owner rather than transferred between financial institutions.

Can I combine several old 401(k)s?

Often, yes. Depending on the rules of the accounts involved, old retirement plans may be eligible to be consolidated into an IRA or another employer's qualified retirement plan. Whether consolidation is beneficial depends on the investments, fees, services and other features of each account.

What if I have a 403(b) instead of a 401(k)?

Many of the same questions apply to a 403(b) when leaving an employer or retiring. The specific rollover options and plan provisions can differ, so the existing plan should be reviewed before making a change.

Should I roll my 401(k) into an IRA?

There isn't one answer that works for everyone. An IRA may offer different investment choices and services, while your employer plan may have its own advantages. The useful question isn't simply “Can I roll it over?” but “What do I gain or give up if I do?”

Do I need to roll over my account to meet with you?

No. We can first review your existing retirement account and talk through your situation. A conversation does not require you to transfer your account or make an investment change.

Have an Old 401(k) and Aren't Sure What to Do With It?

That's a perfectly good reason to have a conversation.

Bring your most recent statement and we'll start by figuring out what you currently have, what your choices are and how the account fits into the bigger picture.

Start the Conversation

Before rolling over assets from an employer-sponsored retirement plan, investors should carefully consider and compare available alternatives, including leaving assets in the existing plan, moving them to a new employer plan when permitted, rolling them into an IRA, or taking a distribution. Factors may include investment options, fees and expenses, services, withdrawal provisions, creditor protections, tax considerations and other account features.