Strategic Wealth Designers: Rolling over a 401(k) to an IRA

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The U.S. Department of Labor recently issued new regulations regarding rolling over 401(k)s. This sparks the question in many – what should I do with this money? Fiduciary financial advisor Jordan Schwartz of Strategic Wealth Designers joined us on the newscast to discuss rolling over a 401(k) into an IRA. 

“These regulations are in place to help protect investors,” Schwartz says. “All financial advisors are not fiduciaries, which are required to act in the client’s best interest. This means that those who aren’t fiduciaries may make a suggestion that benefits them, rather than the investor. Fees are a big concern in this case, as an advisor who isn’t a fiduciary may suggest an investment that is higher in fees to increase their compensation.” 

It is a common choice to rollover money from an old employer sponsored 401(k) to an IRA account. The benefit of doing this often stems from having reduced fees and increased investment options in the new IRA account. Additionally, consolidating dormant accounts will help simplify your finances. 

“People often do a direct rollover into an IRA,” Schwartz says. “This means the money goes directly from your 401(k) account to the IRA custodian. You can also have the money paid to you and then reinvested later. But this must be done within 60 days to avoid a penalty, as money that isn’t reinvested is seen as a permanent distribution. You also have to be conscientious of tax implications with this option.” 

Understanding the benefits and logistics of a 401(k) rollover can help you decide if it may be right for you. To see additional stories surrounding business and economic news for Denver area, visit https://KDVR.com/Money and if you have a question for Jordan send an email to info@swdgroup.com

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