You likely see many ads for rolling over a 401(k). It’s a fairly popular way for brokerage firms to gain clients.
Rolling Over a 401k
But just because you could, doesn’t automatically mean you should.
It’s can depend on the type of 401(k) plan your prior employer had.
For example, if you leave your employer at 55 or later you may be able to start withdrawals.
You usually can’t do that with an IRA.
Also, many 401k(k)s provide mutual funds at a different class (I) than the retail version. There can be different classes of the same mutual fund; so it’s important to know which are offered.
I class are like buying a mutual fund at a volume discount.
This is because the expenses are lower for this class than others (A, B, or C).
Where to Start
Essentially, the starting point when considering rolling over a 401(k) is first looking at the quality of the plan and the quality of the funds offered through it.
It may include funds at prices you wouldn’t be able to purchase in an IRA, so it’s definitely a good thing to know.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.