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Money Minute
Quick Tips
Things to Keep in Mind When Changing Jobs
Money Minute
Don’t leave your retirement funds behind.
 

As exciting as starting a new job is, it can also be a very hectic time because there are a lot of moving pieces involved. One of those moving pieces is your 401(k) plan.

First and foremost, you need to make a decision about what to do with the 401(k) plan at your former employer. Many people opt to rollover their 401(k) plan into a traditional IRA rollover account held at an investment firm. This is commonly an attractive option because this oftentimes gives you access to more investment options than were available with your previous employer, as well as allows you to consolidate your finances. You may also have the option to rollover your old 401(k) plan into the 401(k) plan at your new employer. Whatever you do, however, do not cash out.

When it comes to contributing to your new firm’s 401(k) plan, there may be a wait period before you may be eligible to make contributions. If you are subject to such a wait period, do not get out of the habit of making retirement account contributions. Instead, make contributions to an outside Traditional IRA or Roth IRA in lieu of your 401(k) for the time being. Be sure to keep in mind the annual IRA contribution limits of $6,000 (if you are under 50), and $7,000 (if you are 50 or older). Of course, don’t forget to begin making contributions to your firm’s 401(k) as soon as you are eligible. If your employer matches contributions, be sure to contribute enough to take full advantage of the match because you don’t want to leave free money on the table!




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