401(k) Rollovers - How, Where, Why

If you live in a major metropolitan media market, there is probably no doubt that you have heard a Fidelity or bank commercial about 401(k) rollovers.

Did you know that almost half of all workers spend their entire retirement savings balances after switching jobs?

Are you one of those people? I dont mean to sound harsh, but if you are, you need to wake up. Americans are living longer and longer and if you really want to be working when you are 75, then by all means go ahead and continue that spending.

Here is exactly what you should do with your 401(k) if you leave a job:

The How

Call up your plan administrator, usually the HR director or Owner of your company, and ask them what forms they require to rollover your 401(k) plan. Have them fax or email you the form.

The Where

Take the form to a Financial Advisor. You can find a financial advisor at any bank branch, any local broker/dealer office, or you can seek out an independent, like myself. WiserAdviser.Com has a database full of independent investment advisors. The advisor will then help you complete the form and will usually make the transaction happen behind the scenes. All that will change is where you are receiving your statements from, unless you ask your advisor to specifically reallocate your investments.

The Why

Penalties are extremely severe for early withdrawal of 401(k) money. Avoid this at all costs because if you dont, you will miss out not only on future interest earnings, but you will be sacrificing a retirement future that is almost sure to last nearly 1/3 of your natural life.