Broker Check

509-783-2040

401k and IRA Rollovers

<span id="_mce_caret" data-mce-bogus="1"></span>Client Centered

When it comes to retirement planning, there are a lot of variables to consider. One of the biggest financial decisions is what to do with your retirement account when you leave your current job. At 3 Rivers Financial, we can help you navigate your options to make the best choice for your future. Should you rollover your 401K into an IRA, keep it in the current account, or transfer it to your new employer’s retirement plan? Decisions, decisions! We can help you compare rollover and account types to find the optimal fit for your needs.

 I’m leaving my current employer. What are my options for my retirement plan?

If you have a retirement account with your now-former employer, like a 401K, our financial advisors will explore several options that are available to you once you are no longer with the company. These include:

  • Rolling over the funds from your 401K into a Traditional IRA or Roth IRA
  • Keeping your 401K active with your former employer
  • Rolling over your 401K into a 401K plan with your new employer
  • Cashing out your 401K (This is typically not recommended.)

What are the types of rollovers?

If you decide to go with a rollover, you have the option to go through with it directly or indirectly. A direct rollover would classify as an electronic transfer from one account to another, usually via a wire transfer. The institution that handles your 401K could also take out the funds in the form of a check that is addressed to your new retirement account, which you would then deposit. In an indirect rollover, you could take out the funds in cash, but you would have to deposit it into the new retirement account within 60 days to avoid incurring any withholding taxes and/or penalties. 


If you are rolling the funds over into a similar account - for example, a Roth 401K into a Roth IRA - then you will not have to pay additional taxes during the transfer. If you are transferring into differing accounts - for example, from a Traditional 401K into a Roth IRA - then the process will differ slightly and there will be income taxes involved.



Should I stay with my former employer’s retirement plan or transfer it to my new employer’s 401K option?

This question has lots of specific details that we’ll review together, but some people do choose to continue financing with their former employer’s retirement plan. In these cases, it’s usually because their new employer either does not have retirement options available or the benefits are less enticing. 



What are the benefits to an IRA rollover?

In most cases with IRA accounts, you’ll usually have more investment options compared to a 401K. You can choose from assets such as stocks, bonds, certificates of deposit (CDs), mutual funds, exchange-traded funds (ETFs), real-estate investment trusts, and annuities. Our advisors will work with you to decide whether a rollover is the best choice to fit your financial goals and if so, what type of account would be the most beneficial.