Tip:
Highlight text to annotate it
X
Should you roll over your 401(k) into a self-directed IRA?
When you change jobs and go from one company to another or retire, you can choose to leave
your money in that company's 401(k) or you can choose to transfer it to an IRA.
One reason you may want to keep your money in a company 401(k) is that you retain the
hardship borrowing privilege, which is not available when you put move to an IRA.
Also, if you really like how your 401(k) has performed, you may want to retain your money
there.. However, there are some very good reasons
for transferring your old 401(k) money into an IRA.
First, you have a many more choices with an IRA, thousands of mutual funds and stocks,
for example. In addition, you can hire a professional money
manager to manage your IRA for you. There are many capable third party money managers
available, and they will manage your account based on your personal tolerance for risk.
Hiring a professional money manager can make a lot of sense if you are not particularly
keen on managing your money by yourself or don't have the time or talent to make the
decisions by yourself.. And if you're tired of enduring the ups and
downs of the market, you can choose to place your 401(k) money into safe money instruments
like a fixed index annuity IRA which has the potential for producing higher than average
interest rates without the worry of losses due to stock market declines.
With all the possibilities available, many people are finding it very attractive to move
their money out of their old 401(k) and into an IRA.