In the middle of all the excitement that comes with landing that new job, make sure you don’t forget about the retirement money you already socked away in your former employer’s 401(k) plan.
That’s the advice offered by Rianka Dorsainvil, a millennial certified financial planner and owner of Your Greatest Contribution.
Dorsainvil says it’s important for everyone to understand all the options available to when it comes to 401(k) plans. There are four ways to go: Roll the money into a new employer’s 401(k) plan, move it into an individual retirement account, keep it in your former employer’s 401(k) plan, or cash out your old account.
Almost all 401(k) plans now accept rollovers from other retirement plans. And consolidating your retirement money does make it easier to manage, Dorsainvil admits.
When rolling the 401(k) money into an IRA, it’s important to check all of the fees and expenses that may be associated with that move, she said. This choice does give you more control and flexibility.
Keeping your money in your former employer’s plan is your legal right if you have at least $5,000 in your account. Dorsainvil suggests you ask how long you have to decide. In most cases, you get 30 to 90 days.