Pros and Cons of Not Rolling 401K From Previous Jobs to an IRA - I

Q. I have several 401(k)s from my previous jobs, should I roll them into an IRA?

A. If you talk to a representative from a financial service firm, chances are the advice you will receive is to consolidate and rollover those 401(k)s to an IRA at those firms. But like everything else, there are pros and cons doing so.

Pros of Rolling 401(k)s to an IRA

• The previous jobs' 401(k) plans have lousy fund choices (with an IRA, you will have tons of choices)
• The previous jobs' 401(k) plans' funds all have high fees (with an IRA, your fee tend to be much lower)
• You can consolidate all your investments and better manage portfolio allocation
• You won't forget you have a small amount sitting in a 401(k) account at an employer you worked 30 years ago!
• If you are 59.5 or older and want to take withdrawals, it's easier to do so from an IRA account.

In our next blog post, we will discuss some of the Cons of rolling 401(k) from previous jobs to an IRA.