401k Transfer with New Job

What to do with a previous employer's 401k balance when switching jobs

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You've left your employer with a 401k balance, what do I do?

Don't leave it there. You should either have it transferred to your new employer 401k OR move it to an IRA.

Why an IRA?

Individual Retirement Accounts (IRAs) are investing accounts that have tax benefits which promote retirement savings. With an IRA, you can withdraw money out at your own will, but the money will then be taxed.

What to do with moving your balance to an IRA.

If you choose to move balance to an IRA, either use a financial advisor or you can use financial services such as Fidelity or Vanguard. With the money you transfer, here's an investment recommendation; use the Target Date Fund (that's the common name, which most fund families have), and use the date of which closely matches the year you turn 65 years old, it's that easy. Also, be sure to use either Traditional or Roth IRA depending on whether your 401k was Roth or Traditional.

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-RR