When you are thinking about your financial plans, don’t forget to tidy up any hold over 401k accounts. A recent study showed that a good 25% of American workers have residual money in an old 401k plan at a former company. We want a unified effort for your retirement funds. All the money should be pooled and focused in the same direction. Think of it like watering a plant — you want all the water going in the same area, otherwise the plant is not getting the full benefit of the water.
A 401 k rollover is very simple to do, even if you left the job months or years ago. Check with your HR department or Benefits admin for details. At most companies, a 401k rollover account request is a single piece of paper. Yes, that’s all. In this day and age of bureaucratic forms, a simple single-page form is a rarity.
Once you have made the request, the holding company will begin the process of transferring the funds to your current company. The 401k plan rollover has four steps. The first part, the request, you have already done. Now the company must tabulate the account’s worth. This second step can be a few weeks to a few months, since most companies tabulate quarterly for matching purposes. Once that is done, the next step is the transfer. Let’s say you want to do a 401k rollover/Roth IRA account. The transferring company needs to know that information ahead of time. The last step is the most important: you now can allocate how the funds are distributed within the account. Most likely you already have a percentage spread decided so that your 401k account is balanced between growth funds and moderate risk funds.
401k rollovers can seem daunting. It can feel like a lot of things can go wrong, but that is simply not true. It is a simple process and the financial houses do it all the time, so you really should have no concerns about taking action. Funding your future is too important to leave to chance. Get all of your retirement dollars in one place, working together for you.
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