[Taken from the Library of Bob]
US News & World Report
By Kristin McFarlandNov. 9, 2018
Most investors don't realize the drawbacks of ignoring an old 401(k) or understand their options.
MANY WORKERS LEAVE A 401(k) or 403(b) retirement plan behind after switching jobs for one of two reasons: they didn't know what to do with the account or they never got around to calling the plan provider to have the funds rolled over into an individual retirement account. For individuals in industries where turnover is common (such as biotech), leaving behind a string of old retirement investment plans can become a real problem – potentially impacting your retirement goals.
In most instances, rolling funds out of an old 401(k) plan and into an IRA only takes a matter of minutes. However, for some investors, the sticking point stems from a murky understanding of the drawbacks of keeping funds in old retirement plans.
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There are some great 401(k) plans out there. I have been a 401(k) Advisor for about 8 years and have gone into many businesses and found that they had a solid 401(k) plan with low fees. For many, the best place may be to keep your money with that provider. However, the Dept. of Labor started cracking down on plans in 2011 because there were so many hidden fees associated with a 401(k) plan. Plans were seeing fees in excess of 2% (or more) of the asset value annually. It was terrible, and while it has gotten better, it is far from great. 401(k) providers can do a great job hiding fees through revenue sharing and other strategies.
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The concept behind this article and article title angers me every time I scroll by it in the article list.
When I was terminated from my last job, I did not know how to cope with my 401k funds. In desperation, I asked the corporate manager who had fired me to make an appointment for me with the company's 401k advisor. The advisor was right on top of things. He wanted to get my money out of the 401k and into an IRA (which his company would control). He (the advisor) then became extremely irate with me when I could not tell him how much other retirement money I had which he also wanted to get into this IRA. It…