By Rob Snell
Your employer-sponsored retirement plan is a valuable asset. But sometimes things happen that can affect the status of your plan. So, for example, if you work for a hospital that changes ownership, and you have been participating in a 403(b), 457(b) or 401(k) retirement plan, what should you do with it now?
Basically, you have four options:
Cash out your plan. You can simply cash out your plan and take the money, but you’ll have to pay taxes on it, and possibly penalties as well. So, unless you really need the funds and you have no other alternative, you may want to avoid liquidating your account.
Roll your account into your new employer’s plan. If it’s allowed, you can roll over your old 403(b), 457(b) or 401(k) plan into your new employer’s plan. Before making this move, you’ll want to look at the new plan’s investment options (which should be numerous) and fees (which should be low). If you move the money directly to the new plan, you won’t be taxed at the time of the transfer, and your funds can continue to grow tax-deferred.
Leave your plan with your old employer. If your account balance is above a certain level, you may be able to leave your plan with your old employer’s plan administrator. You won’t be able to contribute any more money to the plan, but if you like the investment options you’ve chosen, keeping the money in your old plan might be a viable choice.
By Rob Snell