"Progress is man's ability to complicate simplicity." - Thor Heyerdahl
Let’s face it, not everyone is blessed with the perfect career from the first job out of college through the final day of their working years. Many people take a 3-4 jobs to find their career, then through company expansion, merger, downsizing, bankruptcy or personal needs, family, kids, etc etc… Name the reason, end up changing companies a handful or more times through the working years. This creates a dilemma – of the many difficulties this creates, let’s address how to approach the often forgotten company retirement plan – your 401k, SEP, SIMPLE, pension, 403b, TSA, TSP and others that are similar. Don’t spend it and don’t leave it.
Don’t Spend it – this is not a windfall. You’ve worked hard for those funds and they should work for you the rest of your life. The penalties for taking funds early can dramatically reduce what you’re getting out of them. Not only that, without those funds, retirement could not only be harder, retirement may not happen. Just to illustrate, at 8% growth, $5,000 over 30 years could grow to $50,000. What if we’d spent $50,000 instead of $5k? 30 years later, $500,000 gone. Every penny counts and the longer you have, the more potential you might lose.
Don’t leave it behind – you could forget it or lose it which is worse than spending it. Consolidation is your friend and you have many options! Moving it to a financial planner like Engage Advisors, LLC, or personally managing your own IRA, or rolling it into your new employer's 401k plan will help tremendously depending on how much help you want. With us, you get ongoing financial planning advice, with your new 401k you get that vendor's materials and perhaps an investment company will give sporadic advice, finally going alone, you get to control where you are investing.
Consolidating can reduce fees, maintain control, even rescue the assets from companies that may not be around decades down the road - and to get your 401k moneys, you often have to get a hold of the old employer...
Moral of the story, it's your money, it's your retirement and it's your opportunity. Better to not squander it or ignore it.