Is a 401k Rollover Right for You?

Once you leave a job, you might have a 401k plan to make a decision about. Should you do a 401k rollover? The answer is “probably,” for several reasons. For one thing, you will have access to a lot more investment options from different companies, some of which might have lower fees. (This is because you sometimes pay higher administrative costs with a large company 401k plan.) But perhaps most importantly, a 401k rollover puts you in charge of your own money.

Is a Roth IRA Better Than a Traditional IRA Rollover?

At APO, we get asked this question a lot, and the answer is “maybe.” As you get closer to age 70-1/2, you get closer to mandatory distributions known as RMDs, when the IRS requires you to start taking money out of traditional IRAs and tax-deferred 401k plans. RMDs can throw you into a higher tax bracket in certain years, so we will crunch some numbers and see if incrementally converting to Roth or similar tax-free accounts might make sense for you given your age and tax situation.


WATCH: Ray Stein – 401(k)

Rollover 4:27

Retirement planning was a lot different in the past. When Social Security was originally designed, it was developed in conjunction with pensions, which less than 20% of people even have anymore. Now, ubiquitous 401k plans have no easy mechanism to convert them into retirement income, so retirees often worry about running out of money. Another problem in retirement is income taxes which can increase when RMDs begin at age 70-1/2. APO Financial can help with these issues and more.

WATCH: 401k & In-Service Distributions with Ray Stein and John

Goodhue 4:15

If you are 59-1/2 or older and still working for the same company, you usually have the option of doing a 401k in-service distribution. This is a type of 401k rollover that incurs no tax consequences if you move the money into another tax-deferred account, like a traditional IRA, and you can usually still continue to participate in your company plan. The 401k in-service distribution allows you more choice in terms of your investments, puts you in control of your money, and you may pay lower fees.

WATCH: Can you overfund your

401K? 3:12

Can you overfund your 401k? The answer is yes–because of taxes. From a young age, you’re told to put as much money away in a 401K as possible, but in reality, there is a maximum range you should target for your tax-deferred, qualified retirement accounts. You have two entities who can tax you—the federal and state governments, both of which can change tax rules—and we watch them closely. Retirement planning companies like Asset Protect One can help you invest for specific results.