The average American will switch jobs several times throughout their career, which can result in having several 401(k) retirement accounts with different employers. If this sounds like you, it may be time to think about a rollover into an IRA.
Benefits
Tax advantages: A Traditional IRA allows your assets to grow tax deferred.
Flexibility: Many employers put restrictions on the 401(k) they sponsor, which may limit the investment options you can choose from. A self-directed IRA may give you more freedom to invest in what you want, based on your long-term goals.
Simplicity: Consolidating your retirement accounts into a single IRA account can simplify the process of growing a retirement nest egg. You’ll have one account to manage instead of several. This means fewer statements to keep track of and potentially less fees to pay.
Additional benefits: Your IRA custodian or administrator may provide investment tools or education to help you achieve retirement readiness.
Considerations
Before you move 401(k) assets into an IRA, talk with your financial or tax professional to ensure you understand how such a change will affect your taxes, available investment options, and costs. You’ll also want to understand the rules governing when and how you may take money out of the IRA. You’ll want to transfer assets directly from your employer’s 401(k) to your new custodian or administrator. to avoid a hefty 20% withholding.
Ready to get started?
Opening an IRA can be relatively easy once you’ve discussed the pros and cons with your financial or tax professional. If you’ve done your due diligence and have decided it’s the right next step for you, call us to get started today. We welcome the opportunity to assist you.
This material is provided for general educational and informational purposes only and should not be considered to be legal, tax or investment advice. Provident Trust Group, LLC is a non-discretionary, passive, directed custodian that does not sell or solicit investments and does not provide investment advice or recommendations. Provident Trust Group, LLC is not obligated to review and does not endorse any investment or investment advisor, and individuals are responsible for the investments in their accounts. Consult with a tax and/or financial advisor to determine what may be best for your individual needs.
