Unsure whether a 401k rollover is the best option for you to handle your retirement funds and loans (or “laenud” in Estonian) or not? If yes, then read on because this article would explain the benefits of a 401k rollover. First and foremost, you have to know the options you have when it comes to your 401k plan. The moment you decide to leave the company, you have to think about what to do with your retirement funds.
One of the things you can do is to cash them out (or take a “vikelaen” in Estonian). But before doing this, you have to keep in mind that you will be taxed greatly upon withdrawal of money. This would not be a good decision, especially when you need all the money that you can get. Another thing you can do is to not rollover 401k but instead keep your funds in the current plan. However, doing this would limit your from making investments. A 401k plan offers limited investment options. Also, it would not give you full control over your funds because the previous employer is still holding the account for you.
This is where rolling over your 401k to IRA comes in. When you do this, you can have better management of your account, as you will have more freedom over it. You can invest the money on any of your preferences. Moreover, you can keep track of your funds because all your plans will be placed into a single independent retirement account. You just have to look for a good financial institution that offers IRAs. If you’re having a hard time understating this kind of stuff, you can always turn to a consultant for help. The consultant will surely be able to recommend the best option for you. Keep in mind that when it comes to your retirement funds, you have to weigh all the pros and cons and take the best step for you.
