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Each employer has different options for investing your 401K savings. Some employers have a lot of choices while some have just a couple. Some choices may fit your situation (age for example) better than others. So, look at each company's investment options and see which you like best. Let that company be the one who holds your 401K, at least that part of it and at least for now. Do NOT take your money out unless it is life or death. Either let it stay where it is or roll it over to the next employer.
I would not let it stay with the old employer...at the very least roll to IRA with a company of your choice.
Hi I recently left my job with my previous employer that made 401K contributions but didn't necessarily match. I've since left that job to work for another employer (state of california) which does not offer a 401k match.
I now have the option to either cash out (currently total value is about $56K in 401K + $4K in minimum pension plan) or rollover into my new employer's 401K or 457 plan. The new employer does not contribute to the 401K, only the state pension.
Over the past 3 quarters or so, I've not seen my 401K grow, but have seen it shrink at times and then regain its loss, for the most part. I'm worried that I could be risking my 401K getting cut in half at a critical time or not really growing much over the coming years, even though historically it's supposed to be a good bet that 401K's will go up and experience the "magic" of compounding.
I'm wondering if it may be better to cash out the 401K from my old employer (while possibly staring to contribute to a new 401K at new employer, or not), and taking the proceeds (after 10% early withdrawal penalty, 28% higher bracket fed taxes, and state taxes) for business ventures with the hope/expectation that the returns will exceed what I'd get with a passive 401K left open for the next 20 years. Let's say I get like $30K net after all the taxes and penalties are factored in. I'm just wondering if it'd be better to cash out and put that money into other ventures or be at the mercy of the markets and keep it in 401K rollover and cross my fingers over the next 20 years or so. OR, I've also heard of self-directed IRA's which I can put the money into and possibly use the funds to invest in real estate ventures? I read there's more paperwork involved with that though.
Let's say I am able to make approximately a starting net profit of $500/mo on some side venture, using this money. If I were to be able to do this indefinitely, or even increase net profits over time by increasing my volume, would I ultimately do better, worse, or same as leaving the $60K in a new employer 401K with no future matches, only my continued monthly personal contribution of maybe 10% /mo (or approx $310)?
DO NOT cash out your retirement funds!!!! YOU WILL REGRET IT!!!!!
Roll over to IRA or new 401k.
Side venture? You know what they say about putting all your eggs in one basket....This is your retirement money. It is to protect you from spending your elder years flat broke and unable to enjoy things. A failed business is bad enough, but a failed business plus your last 20 years in poverty?????
DO NOT cash out your retirement funds!!!! YOU WILL REGRET IT!!!!!
Roll over to IRA or new 401k.
Side venture? You know what they say about putting all your eggs in one basket....This is your retirement money. It is to protect you from spending your elder years flat broke and unable to enjoy things. A failed business is bad enough, but a failed business plus your last 20 years in poverty?????
Roll it to a traditional IRA via Direct Transfer with one of the major fund companies. Vanguard, Fidelity, etc. Put in money market account...then learn about the investment choices and choose one you feel comfortable with.
Why do you say this? The old employer may offer better plans.
The old 401k probably does not have the selection of funds that are out there in the open market.
My current 401K uses vanguard but we can only access like 20 funds. if I left the firm I would move it immediately and have access to everything that Vanguard has to offer or maybe split it up between 2 companies.
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