Summary: Consider pros and cons when deciding to roll over your 401(k) to an IRA.

From Yahoo Finance: 2025-04-20 10:30:00

Changing jobs and deciding what to do with your 401(k) money can be complex. You can leave it, roll it over to a new employer’s plan, or transfer it to an IRA. Consider pros and cons when making this decision to ensure it aligns with your investment goals.

401(k) plans often focus on accumulating wealth with stock funds rather than bonds. As you near retirement, consider shifting to a plan with more bond options for a balanced portfolio. IRAs offer more investment control, allowing you to tailor your mix to meet personal goals.

Investing in an employer-sponsored 401(k) means paying fees associated with the plan, reducing your profit margin. With an IRA, you have more flexibility to choose where to open it and which company manages it, giving you the opportunity to find lower fee options.

401(k)s provide more protection from creditors due to ERISA regulations. On the other hand, IRAs may have varying levels of protection depending on state laws. If your 401(k) holds employer stock, explore tax-saving strategies like net unrealized appreciation for potential benefits.

Deciding whether to roll over a 401(k) to an IRA depends on individual circumstances. Consider factors like debt concerns and investment preferences. While an IRA offers more control and diverse investment options, a 401(k) may be better for those seeking creditor protection and tax advantages.

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Read more: Pros and Cons of Rolling Over Your 401(k) to an IRA