Most Americans have at least some of their retirement savings sitting in workplace retirement plans like 401ks, 403bs, SEP-IRAs and the like. And when you leave a job, due to a retirement transition or not, many people wonder what they should do with the savings they’ve accumulated in the plans.
We’ve noticed that the more people tend to have in their retirement plans, the more reluctant they are to take action out of fear of making a mistake. In this episode of the podcast we’ll answer several questions about 401k rollovers:
· Should I keep my savings in the 401k or roll the funds into an IRA?
· Can I roll my 401k directly into a Roth IRA?
· My savings is in the Federal TSP. I’ve heard the plan is really good. Should I roll the funds into an IRA when I retire or stick with the TSP?
We’ll also review the logistics of 401k rollovers and how you can avoid major mistakes.
Show Notes
[02:12] Market Update – The Federal Reserve lowers interest rates by 0.5%, impacting stocks and bonds.
[13:27] Article of the Week – Morningstar’s article on “Low-Volatility ETFs”
[19:20] Low-Volatility Funds - Low-Volatility Funds and their performance in changing market conditions.
[24:37] Retirement plans – Grant explains why so many people are using 401K plans.
[31:00] IRA - The advantages of individual retirement accounts
[33:30] Essential Steps - Grant explains the process of rolling over funds from a 401(k) to an Individual Retirement Account (IRA).
[37:50] The caveats - Important considerations and potential pitfalls when rolling over funds from a 401(k) to an IRA.
[40:20] Roth IRA - Key considerations and tax implications of rolling over 401(k) funds to a Roth IRA.
[45:19] The Thrift Savings Plan – Grant explains why TSP is a solid choice for many workers.
Resources
Are Low-Volatility ETFs Dead?
morningstar.com/funds/are-low-volatility-etfs-dead