TexasEscapes.com HOME Welcome to Texas Escapes
A magazine written by Texas
Custom Search
New   |   Texas Towns   |   Ghost Towns   |   Counties   |   Trips   |   Features   |   Columns   |   Architecture   |   Images   |   Archives   |   Site Map

Columns

Columns | Go Far With Kovar

What Should I Do With My Old 401(k)?

by Taylor Kovar

Hi Taylor - I just left my old company because it was forced to downsize. Fortunately, another opportunity came around at just the right time, but I'm wondering what to do with my 401(k). Do I leave it with my old employer or move it over to my new company's plan? - Nena

Hi Nena
- Happy to hear the job situation worked out! These are tough times for so many, and it's nice to hear good news about people staying employed.

401(k)s are tricky, and your situation shines a light on some of the reasons why. I'm going to give a broader assessment of these accounts to help clarify my point, but I promise I'll finish up by answering your question.

1. Problems with 401(k)s. As far as retirement accounts go, these are not my favorites. The main reasons are that there are too many fees and they're limiting as far as what positions you can hold. You also need to make sure you've worked the requisite years to have 100% of matched funds vested, and if your company closes or files bankruptcy before that time, you might lose money by no fault of your own. Because of these factors, and all things being equal, I'd say an IRA is a better choice.

2. Benefit of the employee match.
To contradict the above paragraph, if you have an employer matching up to 3 or 5% of your contribution and you have every intention of staying with that company long enough to become entirely vested, that's a nice way to pad your retirement account. If you're able to fund a 401(k) through pre-tax contributions and then still add money to an IRA, even better. It's not free money because you have to stick around to earn it, but for those who do stick around, the payments are very real.

3. What to do when you leave. Finally, back to your question. There's no good reason to leave your 401(k) at your old job, and there's not a particularly good reason to roll it over to your new company. Even if you now have an employer you love with a matching program, you can still take that money while turning the old 401(k) into an IRA with better investment options. A 401(k) is a great way to get your retirement funds started, but it's far from the pinnacle of investing.

Whatever you choose, make sure to fund that retirement account as much as possible. Congrats on the new job and good luck!


Taylor Kovar June 2, 2020
More "Go Far With Kovar"
Legal Disclaimer: Information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. To submit a question to be answered in this column, please send it via email to Question@GoFarWithKovar.com, or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.

"Go Far With Kovar"

  • Teaching Your Children About Money 5-26-20
  • Can I Still Afford to Retire After the Coronavirus? 5-20-20
  • Is Now the Time to Invest in Real Estate? 5-12-20
  • Good Summer Jobs for Teenagers 5-6-20
  • Tackling Student Loans and Credit Card Debt 4-28-20

    More »

  • More "Go Far With Kovar" ›

    More Columns

     

     

     

     

     

     

     

     


     


     


    Texas Escapes Online Magazine »   Archive Issues » Home »
    TEXAS TOWNS & COUNTIES TEXAS LANDMARKS & IMAGES TEXAS HISTORY & CULTURE TEXAS OUTDOORS MORE
    Texas Counties
    Texas Towns A-Z
    Texas Ghost Towns

    TEXAS REGIONS:
    Central Texas North
    Central Texas South
    Texas Gulf Coast
    Texas Panhandle
    Texas Hill Country
    East Texas
    South Texas
    West Texas

    Courthouses
    Jails
    Churches
    Schoolhouses
    Bridges
    Theaters
    Depots
    Rooms with a Past
    Monuments
    Statues

    Gas Stations
    Post Offices
    Museums
    Water Towers
    Grain Elevators
    Cotton Gins
    Lodges
    Stores
    Banks

    Vintage Photos
    Historic Trees
    Cemeteries
    Old Neon
    Ghost Signs
    Signs
    Murals
    Gargoyles
    Pitted Dates
    Cornerstones
    Then & Now

    Columns: History/Opinion
    Texas History
    Small Town Sagas
    Black History
    WWII
    Texas Centennial
    Ghosts
    People
    Animals
    Food
    Music
    Art

    Books
    Cotton
    Texas Railroads

    Texas Trips
    Texas Drives
    Texas State Parks
    Texas Rivers
    Texas Lakes
    Texas Forts
    Texas Trails
    Texas Maps
    USA
    MEXICO
    HOTELS

    Site Map
    About Us
    Privacy Statement
    Disclaimer
    Contributors
    Staff
    Contact Us

     
    Website Content Copyright Texas Escapes LLC. All Rights Reserved