Most workers in the United States count on employers to help them save for a financially secure retirement. Employer-sponsored retirement plans such as 401(k) plans and profit sharing plans hold more than $24 trillion in retirement savings.
One of the most important financial decisions workers will make is what to do with assets they have accumulated in their employer’s retirement plan when they leave their job. Traditionally, this decision needed to be made when workers retired, but it’s not just a retirement issue anymore.
Today, most workers will change jobs several times during their working years. Unlike past generations that may have spent most of their career with a single employer, the median tenure for a worker today is only 4.6 years. Each worker who decides to go to work for a new employer may be faced with the decision of what to do with the retirement plan assets in the prior employer’s plan. The choices workers make each time they change jobs will have a significant impact on their retirement nest eggs.
In addition to job changers, more than 70 million baby boomers will reach retirement age and will likely leave the work force over the next 20 years. Each of these baby boomers will need to decide what to do with the funds they have saved through their employers’ retirement plans.
Most workers will have four options for their retirement plan assets when they leave an employer:
- Leave the assets in the prior employer’s plan
- Roll the assets to a new employer’s plan (if continuing to work and plan is available)
- Roll the assets to an IRA
- Cash out the retirement savings
Determining which option is best can be challenging for individuals.
Don’t go it alone. You’ve worked hard to accumulate assets in your retirement plan. There is no “one size fits all” solution. The best choice will vary depending upon an individual’s unique financial needs and savings objectives.
Let us talk through your options with you. Schedule a free, no-obligation appointment today to see if we can help. If we can’t, we’ll find you someone who will!
We’re passionate about improving the financial health of everyone we meet.