Rollover

A rollover, in the context of employer-sponsored 401k plans, refers to the process of transferring funds from one retirement account to another, typically when an employee changes jobs or transitions to a new employer. This transaction enables participants to maintain the tax-deferred status of their retirement savings while consolidating their assets into a single, manageable account.

When an individual leaves their current job, they may have the option to rollover their 401k balance into a new retirement account, such as an Individual Retirement Account (IRA), or into the 401k plan offered by their new employer. This strategic move offers several benefits, including the preservation of tax advantages and potential for continued investment growth.

• Example 1: John, a diligent employee, decides to leave his current job for a better opportunity. He chooses to rollover his existing 401k balance into an IRA to maintain control over his investment choices and consolidate his retirement savings.

• Example 2: Sarah receives a job offer from a different company. She decides to rollover her 401k from her former employer into the new company's 401k plan to keep her retirement accounts organized and simplify her financial management.

‍

• Example 3: Mark, after years of working for various employers, has multiple 401k accounts scattered across different providers. He decides to perform a rollover of all his previous 401k balances into a single self-directed IRA for better control over his investments and to avoid paying unnecessary fees.

‍