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When you leave a job behind, it's tempting to cash out your 401(k) and use the money right now – for everyday expenses, for an emergency fund, or even for a larger purchase, such as a car or down payment on a house. But in these times, when the markets are down and your balance may be smaller than it once was, it's even more important to stay focused on your long-term goal and keep building your retirement portfolio.
Think about a couple of benefits of rolling over your 401(k) to an IRA at Wells Fargo Advantage Funds®:
- If you cash out of your 401(k) early, you could lose nearly half of your hard-earned balance to taxes and penalties. But that's not the worst of it, the potential implication on your future well-being is. Instead, a Rollover IRA will allow you to keep that money and let it continue to grow and compound, all tax-deferred.
- Many 401(k) plans offer a limited selection of investments. A Rollover IRA gives you access to a wider array of investment choices to suit your needs. Or, many clients appreciate the simplicity of our target date funds. Either way, consolidating your assets into one fund family will help you gain control over your finances.
See the difference that rolling over can make to your future
Consider this example. Assume you have $20,000 invested in your 401(k) plan. If you decided to take your distribution in cash instead of rolling it over into an IRA, your balance after taxes and penalties would only be $12,400. If you invested that distribution for 30 years, your investment would grow to $86,817. However, if you did not take a distribution at all and instead rolled over the entire $20,000 into an IRA, your balance would be $218,715.
If you're ready to roll over your 401(k), we're here to help anytime. Call us at 1-800-359-3579.
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