Laid Off? Don't Lose Control of Your 401(k)
As if navigating through quarantine and work life wasn’t enough of a challenge, now we have to deal with the year of layoffs? There have been a series of layoffs this year so whether you’ve been personally affected or naturally concerned that you might be affected then here’s what you should know.
Before we get into, please repeat after me:
MY 👏🏻401K MONEY 👏🏻 IS MINE 👏🏻, AND I CAN 👏🏻TAKE IT 👏🏻WITH ME. 👏🏻
Whether that means rolling it over into an IRA or a new employer’s 401k plan, cashing it out to help cover immediate expenses, or simply leaving it in your old employer’s 401k while you investigate your options, your money isn’t gone.
Roll it like Julia Child…
…into a new IRA
Not sure when you’ll be starting your new dream job (who knows- you could be the next Julia Child), but also don’t want to leave your 401k with your old employer? Then rolling your money into a new IRA could be your solution.
An individual retirement account (that’s what IRA stands for by the way) allows your retirement money to still receive the same tax benefits but YOU have control over what you invest in. 401k platforms are limited and only have a handful of choices, IRAs can be managed by professionals (like us) which can dramatically influence the growth of your account over time.
OR…over to your new employer’s plan
Congrats! You answered all those interview questions and found a new job. Now you it’s your turn to ask the right questions and you might even be able to get more money out of your job change.
Get someone to take a look at what your employer offers. Is there a match? What funds are available? What percentage of your paycheck makes sense to go there? (shameless plug… all questions that we can help with)
... you can cash it out
We have bills, mortgages, and families too so we get that there are certain circumstances in which you might need immediate access to this money. Penalties and taxes are going to come into play, though.
Just remember that us at Power Forward Group suggest you keep this as a last resort because doing so to cover short-term expenses could have compounded negative effects in the long-term.
The Bottom Line
2022 may be another hard year, but that doesn’t mean your retirement years need to be. The job that’s meant to be for you is out there and so is the financial plan that meets your specific needs. While we can’t help you write a standout resume, we can help you financially prepare for your career journey ahead.