401(k) Decision Making

What Options Should I Consider For My 401(k)?

For almost all Americans preparing for your future is always a present-day concern. There are many financial vehicles that allow any person to be able to put money toward their future savings as they are currently working. The large majority of businesses offer their employees a 401(k) plan of varying degrees. A 401(k) is a savings plan that is initiated by your employer and allows an employee to contribute a part of their paycheck (often times with some kind of a contribution match from their employer) before taxes are taken out of the paycheck.  The question that we get from our clients with regard to a 401(k) is what happens to their 401(k) if they are no longer at that place of employment? Many of our clients are not aware of the variety of options open to them.

Is My Retirement Plan Stress Tested?

The first thing a client needs to do is some homework with regard to their 401(k) plan that was put in place by their former employer. This is something that PFS Wealth Management can assist with. The terms of the plan will dictate whether or not leaving your assets in your former employer’s 401(k) plan is an option and if that is one that you feel comfortable with. If you left your former employer for a different job that offers their own 401(k) plan, then it may be advisable for you to take those assets into your new employer’s 401(k) plan.

Another option that you have is to move the assets from an old 401(k) plan with a former employer into an Individual Retirement Account, also known as an IRA. The details of what type of IRA would best suit your needs is something that can be discussed with a team member at PFS Wealth Management, however, by taking this step you would have better control over the details of your own assets that you worked hard for and contributed to. Please contact me through my contact form.

One element that is rarely advisable with regard to a 401(k) is taking an early cash distribution. There are a number of reasons why taking an early cash distribution may seem appealing with the most common reason being due to financial stress. However, taking a distribution before the assigned pay out could potentially cause a number of tax liabilities resulting in you paying more taxes now and, in turn, less of a pay out that you could have gotten down the road. While we can never tell our clients to not take an early cash distribution if they are absolutely set on it, this should be a last resort option and be avoided if at all possible.

With years of experience in a variety of 401(k) planning techniques, the team at PFS Wealth Management Group is confident that we will be able to navigate you through the sometimes-difficult decisions that must be made with regard to your 401(k). We will present you with a number of options that are available to you with regard to your 401(k) and work with you to come to the best solution for your own personal needs. Please call our office today at 888-331-2821 or e-mail me at vincent@pfswealthgroup.com to schedule a personal consultation with me to learn more about your options.



Vincent A. Virga