After leaving my employer, I am now self-employed. I have a 401(k) from my employer. Should I just leave it there, or is there anything smarter to do?
2007-11-04 01:53:57 · 4 answers · asked by clash_of_civilizations 2 in Business & Finance ➔ Personal Finance
I am sure you are going to get MUCH more intelligent responses than this, but I think you can roll it over into an IRA. You sure want to do anything but cash it out, because they will tax the bejeebers out of it. 33% I believe!
Great job on taking the step to be self employed!!!
2007-11-04 01:02:57 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Go to a mutual fund group like T Rowe Price. Set up a couple of mutual funds. When you set then up mention that they are "IRA/Rollever Accounts". That way everyone will know that they are before tax retirement dollars. I would suggest setting up one account in a different kind of investment for every $15,000 that you have to invest. For example, if you have $60,000, pick four funds. For example: American Growth stocks, US corp bonds, Energy stocks, and International stocks. Some group so that you are diversified.
I did this several years ago for a 401k plan and it has worked out very well so far.
P.S. I disagree with Malcolm above. He said to invest it in a company. To do that, you would have to pay income tax on it now and then you would be investing it all in one risky, taxable venture. Don't do that.
2007-11-04 01:11:15 · answer #2 · answered by hottotrot1_usa 7 · 0⤊ 0⤋
With some plans, you can leave your funds invested in the 401(k). Others require you to pull it after you leave. Check with the plan trustee or administrator.
You absolutely do have the right to roll it over into an IRA which is what I would recommend. That way you have maximum flexibility for choosing investments.
See www.401k.org, www.ira.com, www.investopedia.com
2007-11-04 01:09:41 · answer #3 · answered by npk 7 · 1⤊ 1⤋
The best thing you can do with most of it is to invest in in a company that does well,and hopefully it will help your company too.
Having such a large amount can be very daunting and will easily be lost if you don't seek reliable advice.
If un needed and you live a happy life without it,leave it alone as it will come in very happy when you have no work or another venture later on in life.
2007-11-04 01:03:41 · answer #4 · answered by malcolm z 2 · 0⤊ 1⤋