What To Do With Your 401k From Your Old Job

So if you are watching this video, you probably have some questions about your 401k and what to do once you leave your job, and what are the options and consequences.

First thing is first, you do not want to liquidate it and sell it everything, that would be done, because if you are to young, you will most likely take a massive penalty.

Number 4 Is my favorite

????Call Me????: https://bit.ly/30IBr0i

????Second Channel????: https://bit.ly/3c4sVPS

????????‍????Financial Freedom Course????????‍????$100 OFF CODE: LONGTERM
Link: https://longtermteam.teachable.com/p/financial-freedom-steps-from-nothing-to-freedom

????MY M1 FINANCE PORTFOLIO???? PLUS $10
Link: https://m1.finance/37SHd4241z-N

Cash Out is Option but Should be Avoided

So as you should know

A 401k is pre tax account

So you get to invest your money without paying taxes

But eventually you will have to pay taxes obivoulsy

So if you have let’s say 50k In your 401k and you want to take it out

If you are not 59 and half or didn’t stop working for that employer before the age of 55,y ou will be hit with an early withdrawal penalty )

So here is a picture I found on the fidelity website while doing research

You get left with only $29,500, which is insane

Roll it over into a Traditional IRA

You can do for free

and now you can pick from a wider range of investments

plus if you are under 59 and half you can use a portion of your money for buying your first home or higher education expenses

the problem is though:

you will have RDM ( Rquiered minimum mandory withdrawal ) once you reach 73

bascially means you will have to take money out

and since an Traditional IRA is also a pre tax account, you will have to pay taxes

Roll it over into your new employers plan

So this is a very simple one to do

Its rolling it from your old to your new

Some emplyer allow it and others don’t, so you have to check and see

Benefits:

401k if you continue to work, you can wave the RMD

You have more protections from creditor with a 401k

And you can contrinue to allow the money to grow tax free

Roth Ira Ladder

This is my favorite

But its expensive and it cost money

But the benefit will be long term

Here is what you do:

You roll your old 401k into a traditional ira

Then roll over in chunks the money into a roth ira

The benefit:

You’re money will grow tax free

You will not be tax when you take the money out

And they also don’t require rdm

Cons:

You’ll have to pay taxes on the money you roll over

Because you’re moving it from pretax to after tax retirement account

But you’ll need those benefits later not now

Do nothing

Some people chose not to anything

And if the employer has high fees that’s a problem

* PRO TIP*
INFORMATION IS EVERYTHING
????1 on 1 Talk + My Budget + Stock Investments????
https://www.patreon.com/tommybryson

????Merch????
https://teespring.com/stores/tommybryson

✅2 FREE AUDIOBOOKS✅
https://amzn.to/2Enayo8¬¬¬

????M1 FINANCE $10????
https://m1.finance/37SHd4241z-N

????ACORN FREE $5????
Link: https://acorns.com/invite/38EYSU

⚡FREE KINDLE UNLIMITED⚡ (traditional reading)
Link: https://amzn.to/2VGbxt9

????????‍????DISCORD PRIVATE GROUP????????‍????
https://discord.gg/EcZEHpA

My Camera Gear: https://www.amazon.com/shop/tommybryson

✔ Help Us Reach 500,000 Subscribers: https://goo.gl/0wvm6w

????All My Social Media????
Link: https://linktr.ee/tommybryson

*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

source