Taking charge of your 401K when you leave a jobPosted: Updated:
PHOENIX -- You may have left your old job recently, but do you know what happened with your 401K? While keeping it with a former employer is better than cashing it out, experts encourage people to take more initiative.
If you're like the everyday American who holds an average of 11 jobs, according to the Department of Labor, you're probably going from one employer to another. You wouldn't leave your purse at your old job, so financial advisors wonder, why leave your 401K?
Nurse Brenda Gross started working at the Arizona Cardiovascular Institute last December. But she admits when she made the transition, she didn't know what to do with her old 401K plan.
"I didn't really know what my funds were, what they were invested in," says Gross. "I made some money but it's really confusing."
"It's somewhere it might be difficult to find, and I've definitely run into that a few times where you're looking at companies that no longer exist," says Mark Asher with Southwest Wealth Strategies.
Asher says rolling over a 401K might just take a phone call and a little paperwork, giving you more control.
"Roll it into an IRA," says Asher. "You can also roll it into your new company's 401k. And the last option is to cash out, which is usually not the best idea."
Cashing out early could mean paying a penalty, and heavy taxes.
Gross says she has more peace of mind knowing exactly where her money is.
"It's for your retirement," she says. "It means a lot for me to have this money in the future."