Switched Careers? Your Retirement Fund Should Follow You

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If you’ve recently switched careers, the last thing you may want to deal with is figuring out what happens to your retirement fund. Luckily, your money is still safe and the process isn’t overly complicated.

If you’re already vested into a pension account, you should get the payout when you reach the proper retirement age. If you’ve contributed to a 401(k) or 403(b) account, you’re entitled to any money that you deposited and any growth on your contributions. Any funds that your employer has contributed into these accounts would be subject to vesting requirements, however. Here’s how to make sure that you can successfully transfer your retirement fund.

Open A New Account

This process can happen in a couple of different ways. First, you could just open up a retirement account at your new employer. If they don’t offer a 401(k) plan, you could open up an Individual Retirement Account (IRA.) This could be either a traditional IRA or a Roth IRA.

Keep in mind that you’d owe taxes on any money that you plan to transfer into a Roth IRA if your previous retirement account wasn’t classified as a Roth.

Initiate The Transfer

After you’ve set up the new account, you’ll then want to transfer the money. To initiate the transfer, you’ll need to download a transfer form from the old brokerage that held your retirement funds. This will require you to include the account number and other applicable information.

Choose Investments

Many plans can offer relatively high management fees. If you decide to transfer your funds into your new company’s retirement plan, it might be a good idea to look for index funds with low fees if they are available.

If you transfer the money into an IRA, you have a great deal more autonomy regarding how you invest your money. You can buy funds or individual securities. However, even if your company offers funds that charge fees, it might be advantageous to invest through these funds if your employer offers a percentage match. The matching funds should provide automatic returns – much higher than any management fees you’d have to pay

Keep Saving

It doesn’t matter how often you switch careers. You should put money aside for retirement along the way. The retirement funds from each job can turn into an ever-increasing snowball of cash. It will provide massive benefits in the future when it actually comes time to retire.



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