A 401k plan – especially if you were with a company that had matching grants – can represent a substantial portion of your retirement savings. Preserving this asset is fairly simple but there are several ways for an employee to do so.
In a similar vein, employers should consider the ways they can help a new employee make the 401k rollover transition as easy as possible. Here is a quick rundown on the most important things to know, but still you should always consult an expert before making any decision concerning your 401k.
Advice for employees – As an employee with a 401k from a previous employer, you have two viable options – move the account to your new employer’s plan or establish a self-directed one. If you are an inexperienced investor or simply do not have the time to manage your 401k assets, by all means, take advantage of the rollover option. On the other hand, if you are a seasoned investor and do not like the fund choices offered by your new employer, opt for self-directing your monies.
Advice for employers – A matching 401k plan – behind a good medical plan – is one of the best benefits you can offer a potential employee. Offering one not only helps to attract the best candidates but also serves to retain them over the course of their employment. Obviously, a good transition process will aid in the transfer of a previous plan. Consult with a professional benefits firm to establish the most employee-attractive but still cost-effective 401k plan for your company.
A final word of advice – Always proceed with caution when making this decision as it will have a significant effect on your financial future. Some factors to consider include your age, how long you have until retirement, your risk tolerance and the amount of your assets. In fact, it never hurts to approach an expert to gain some context for your ultimate decision.
If indeed you are looking for further information on the benefits of 401Ks as either an employer or employee, please contact the experts at Lewis & Palmer Benefits. We can be found online at LPBenefits.com or reached directly at 954-308-7204.