When NOT to do a 401K Rollover

by Fern LaRocca CFP®

in 401K,401k Contribution Limits,401k Contribution Limits,401k limits,401K Maximum,401k Withdrawal

Everyone talks about doing a rollover of your 401K plan assets into an IRA and the wonderful advantages of that. Why do so many people do rollovers— because the receiving firm WANTS YOUR MONEY.

But there are some times when it is appropriate to just leave it with your ex-employer. Here are 4 criteria for staying in place:

  • Your former employer allows you to keep your 401K plan.
  • You like the variety of investment options and the performance of what you have.
  • The investment options are low cost.
  • There is no annual administration fee incurred for you to stay there.

For right now,  it usually is in your best interests to rollover since many people don’t get the 4 benefits above. I suspect that will change in the future when employers start to get better at picking 401k plans that are good for them and their employees.

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{ 2 comments… read them below or add one }

Evolution Of Wealth at

Unfortunately I think the bigger problem might be people who believe they have those 4 benefits that really don’t. I find that most people don’t know where to find nor understand the fees, costs and performance of their 401ks. The worst part might be that the employers don’t even know or understand these things. This can only get better thought right?

Fern LaRocca CFP® at

Yes, that’s true. I believe Brightscope is going to start making the fees more transparent for the employers and employees.