Changing employers is not that uncommon. What is uncommon is being aware of the options you have when transferring your retirement plan to your new employer.
“What happens to my retirement plan if I change employers?”
Well there have been provisions in the law to protect that for many years. Simply you have usually two choices. If your new employer has a comparable plan. So for example, if you are participating in a 401K plan in your present job and your new employer has a 401K, then one option is you can have those monies transferred from the old 401K to the new 401K.
Many people however aren’t aware that there is an additional choice that they have that if you knew about it could make a real difference. And that simply is, you can take that old 401K and you can have that money transferred into an IRA or an individual retirement account.
Now the distinction there is, you have an unlimited number of investment choices that you control when you put your money into an IRA. Whereas, if you transfer it into the new 401K, they typically don’t have the number of investment options that are available to you.
So if that is your situation, and the more money you have in your qualified plan, the more concerned you probably are about real diversification of that money. So know that there are other options that you can look at rather than just moving that money to a 401K.
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