When it comes to saving for retirement, it’s important to work smart, not hard.
For example, strategically rolling funds throughout your retirement account can help you maximize your savings. And since retirement costs can add up faster than you expect, every little bit helps when saving for your golden years.
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This guide explores some of the best strategic retirement rollovers that can help you make the most of your retirement savings.
It’s common to move around multiple jobs during your working years. Many prefer to move to new jobs in search of higher pay. Although moving to a new employer can be a good thing for your income, you may leave with less money in your former employer’s 401(k) plan.
Unfortunately, forgetting about these calculations is common. In fact, according to the North Carolina Council on Financial Literacy, $1.7 trillion is lost in forgotten 401(k) accounts.
If you’ve lost or forgotten about a 401(k) account from an old job, finding that money is critical. Typically, you’ll be able to track down a lost account by contacting your former employer’s human resources department. From there, it’s often as easy as following the paperwork to recover the account.
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For anyone who thinks it might not be worth the hassle, it’s worth noting that a small amount of retirement savings can make a big difference in your golden years ahead. For example, let’s say you recently turned 35 and are ready to get on top of your finances. You note that you had a 401(k) account at a previous employer, which you found contained $7,000. By taking the step to roll those funds into your current 401(k) plan and managing your 8% annual investment return for 30 years, it could be worth $70,000 when you retire at age 65. It’s definitely worth finding out!
Planning for retirement is hard. But it’s much more difficult when you have a series of old 401(k) accounts from previous employers to keep track of. Fortunately, it’s usually easy enough to roll over your old 401(k) plan to a new employer’s 401(k) account.
If you like the new employer’s investment options and fee structure, creating a rollover can help simplify your finances and provide an easy way to save for retirement.
