Over and over again we hear how important it is to roll over an old 401k. Less often we hear the why. Does it make a difference if you leave your money with your old employer or not? There are arguments for and against. Below are three reasons we think it makes sense to take control of those funds.

1. Bankruptcy – I have worked with clients who have left their employer and later found out that the company had filed bankruptcy. Even though there are laws that protect 401k assets when a firm declares bankruptcy it can still take quite a bit of work to rollover the 401k funds.  The amount of time that it can take to obtain your funds can be lengthy and requires diligence and persistence.
2. Investment choices: If you are heavily weighted in company stock it may be akin to putting all of your eggs in one basket. Additionally, the investment choices in the plan may be limited to a select group of investments. Unless you have a financial advisor associated with your 401k plan that is providing great service and understands your risk tolerance, financial goals and objectives it may make sense to seek out an advisor to assist you in rolling over your plan and that can develop an individual investment strategy that will help you to work toward reaching your goals.
3. Costs – According to a recent AARP study about 80% of 401k participants do not know how much they pay for their plan. Many of the costs associated with a 401K plan are hard to determine and can negatively affect the diligent savings efforts of participants. The good news is that starting in 2011; all 401k providers will be required to disclose all fees. Managing retirement assets with a financial advisor may provide you with not only lower investment costs but lower on-going maintenance fees.                  

©2010 Harkins Wealth Management. All Rights Reserved.