Job hopping has become the new norm, with lots of professionals switching jobs every three years, or even more frequently than that! That means keeping track of and figuring out how to manage your 401(k) during a career transition has become more important than ever… and yet, many of us have no idea what we’re doing.
Did you know that there are over 24 million abandoned 401(k)s in the U.S.?
And what’s even more shocking — an old or forgotten 401(k) could cost someone up to $700,000 in foregone retirement savings. Imagine losing hundreds of thousands of dollars just because you left behind a 401(k).
The truth is, most of us don’t really know what our 401(k) options are when it comes to switching jobs. One of the smartest options is to transfer, or “roll over,” your old 401(k) into an IRA, or, an Individual Retirement Account.
Unfortunately, lots of people who have every intention to roll over into an IRA don’t get around to it. Some think their savings are too small to roll over. But even $3,000 in investments could grow into a whopping $40,000 if invested wisely.
The most common scenario: People start the rollover process, but get busy or overwhelmed and never finish.
But not to worry, that’s where a company called Capitalize can help. It’s a free, end-to-end platform that will find your old 401(k)s, help you compare and choose an IRA from leading financial institutions, and pair you with a real expert to make sure your old account is transferred correctly. Yep; you don’t need to do any of the heavy lifting — they’ll deal with the financial institutions for you.
Why Choose to Roll Over Into an IRA?
There are generally four things you can do with your old 401(k) when you switch jobs: Roll over into an IRA, cash out, leave your 401(k) behind or roll over into a new 401(k) provided by your new employer.
Rolling over into an IRA of your choosing — like what Capitalize offers help with — is a tax-free transfer from one retirement account to another. Instead of being managed by an employer, you have complete control over your investments and savings.
Cashing out your 401(k) means you’re pulling out all your savings and putting it in your pocket. Sounds sweet, but you have to pay taxes and penalties on the money. You also miss out on tax-free investment growth, which could put you at risk of not saving enough for retirement.
Another option is to leave your 401(k) behind, paying account fees and giving your old employer complete control of your investments. Choosing this option also puts you at risk of having your old employer force a rollover to an institution of their choosing, making it harder for you to track your money down.
Sometimes, you’ll get the option to roll over your 401(k) into a new 401(k) provided by your new employer. This is an option worth considering, especially if you like the investment options and fees your new company is offering. But it’s still going to be a lot more complicated than just converting your old account into an IRA — plus, you’ll have much less control over your investments and far less visibility . Most people who roll over a retirement account choose to roll over into an IRA because they prefer the added control and visibility.
When it comes down to it, transferring to an IRA gives you more control over your savings and investments, with a wider range of options. This is how you can turn a few thousand dollars in savings…into a few hundred thousand dollars.
Get Free Rollover Assistance with Capitalize
Starting your free rollover with Capitalize is quick and easy. It only takes a few minutes to fill out a form on its site, and then Capitalize’s financial experts can take it from there — they’ve successfully rolled over hundreds of millions of dollars for tens of thousands of Americans.
Capitalize will help you compare different IRAs, and when you find one you like, they’ll handle the roll over and deal with the financial institutions for you. Regardless of whether you have a traditional or Roth 401(k) plan, Capitalize will make sure your money is transferred quickly and accurately. They can also help with other employer-sponsored accounts, like 403(b)s.
You might be wondering how Capitalize is able to offer this service for free. Well, if you decide to open up an IRA with one of the providers on its platform, the IRA provider will pay for your account to be transferred, keeping it free for you.
You can also be sure your data is safe with bank-level encryption — they won’t sell your data, either.
So, what are you waiting for? Don’t let your hard-earned savings slip away. Get started here to let Capitalize help you find the best rollover option for your 401(k) — for free.