Ask Terry Questions What to do with a 401K from an employer I left?

What to do with a 401K from an employer I left?

By Terry Savage on February 15, 2021 | Investments

Hello,

I just left a company that I was with for the last 2.5 years. I had a 401k with them and contributed for the last 1.5 years I was with them. I am with a new company that offers a 401k, but not until I have been with them for a year. My question is, what do I do with the 401k from that previous company? I understand I can roll it into the new company’s 401k plan, but I worry about the fees I would accrue until I can do that. I do not want to withdraw the money because of the taxes I would need to pay on it. I am not sure if you need this info also but I am 40 years old and the account has only $10k in it currently.

I greatly appreciate your help. Also, I love listening to you on WGN! I always look forward to hearing you in the afternoons.

Terry Says

I’m glad you asked! Definitely you will want to do a direct IRA rollover to Fidelity or Vanguard. Call them and tell them yoru current employer’s plan info and they will help you open an IRA rollover account and they will handle the transfer. Do NOT take a check!
THEN, they will ask you how you want it invested! You are young. Put it in the S&P 500 stock index fund and close your eyes until you are age 67. I bet that $10,000 will grow to a surprising amount! Do not sell when times get scary. Make that a totally separate “bet” on your future. You’ll be glad you did.

money

ASK TERRY

a personal
finance question