Nearly all Americans have a majority of their overall net worth in a 401(k) or some other type of retirement plan. Making the best decision regarding whether completing a 401(k) rollover is a vital piece of retirement planning.

It may or may not be in your best interest to move your 401(k), 403(b), 457 plan, TSP, or other company retirement plan when you leave your company or retire.

Nearly all financial advisors that you meet with are going to recommend completing a 401(k) rollover since that’s in their best interest, but may not be your best option.

Unlike many firms, 369 Financial, LLC can help you manage your 401k whether you move it to an IRA, or leave it with your employer. Thus, we have no economic incentive to recommend an IRA rollover if you would be better off keeping your 401k where it is.

401k rollovers
401k rollovers to ira


Here are a few of the reasons that clients rollover their company retirement plans to an IRA with369 Financial, LLC. This is extremely important that you ensure you complete this rollover of your retirement plan CORRECTLY. Otherwise, the consequence may include but are not limited to taxes, penalties, and the hassle of fixing a mistake. 401(k) rollovers at 369 Financial, LLC is a straightforward process where we will guide you to make the best decision for your financial situation.

Here are 7 reasons to possibly complete a 401(k) rollover:


1. Mandatory 20% Tax Withholding.

Retirement Plans are required to withhold a mandatory 20% tax on taxable distributions – whereas an IRA has no such requirement. In retirement, it’s likely you will be a lower tax bracket and having the flexibility to choose your withholding, keep you not your 401(k) provider in the driver’s seat.

2. Your employer retirement plan is an older, more expensive plan.

Many employer retirement plans have high costs which reduce returns. Since the “Great Recession” of 2008, this has been improved, but you may lower your costs by moving your money out of a 401(k) into an IRA.

3. Your company retirement plan has limited investment options.

The average 401(k) has approximately 25 investment options. While 25 may seem like a lot, many of the mutual funds are very similar. Some plans lack asset classes vital to building an efficient portfolio. An example, but not limited to are international bonds, small stocks, real estate, or health care.

4. Your plan has limited beneficiary options.

Many company retirement plans do not allow you to leave your money to a trust set up for your beneficiaries. Few plans allow your heirs to “Stretch” the retirement plan once you have died. (The “Stretch” option means that non-spouse heirs can take annual withdrawals over their lifetime in order to prevent a forced taxable payout of the plan after you have died.) The tax implications of this limitation are tremendous. If you desire for your children or grandchildren to enjoy your 401(k) or 403(b) dollars for their lifetime, or for them to enjoy the creditor protection that a separate IRA trust can provide – then most likely an IRA rollover will have to be performed.

5. Required Minimum Distributions can be difficult.

If you are retired and over age 70 and 1/2, you must make withdrawals from your retirement plan based upon a schedule found in IRS Pub. 590. If these withdrawals are not taken on time, you will face a 50% tax penalty on dollars not withdrawn. If you have several retirement plans, you must make these distributions out of each and every plan. Most people consolidate their 401(k)’s or other retirement plans into one IRA for simplicity of record keeping.

6. Even Roth 401k(s) are subject to Required Minimum Distributions.

Even if your 401k has post-tax or Roth dollars, these dollars are still subject to being forced out of the account according to the IRS’s Required Minimum Distribution schedule. However, if you roll these assets directly to your own Roth IRA, you are not forced to withdraw these funds on the government’s schedule.

7. You don’t want your old company “knowing your business.

This is one of the more common reasons that people rollover their 401(k), 403(b), or TSP when they leave or retire, and are self-explanatory.


The above list is only a few of the reasons that clients rollover their company retirement plans to an IRA with 369 Financial, LLC.  Remember – it is critical to do it CORRECTLY.

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