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What are some good reasons to rollover a 401k to an IRA? A client of mine recently asked that question. So, I furrowed my brows, then looked up at the ceiling and thought about it.
All retirement accounts have advantages. Some have disadvantages. In the best case scenario, a plan is sponsored by an employer who makes matching contributions, allowing you to grow your funds faster than you could on your own. That’s what you have with a 401-K; best case scenario.
But, since they are employer sponsored plans, one reason to rollover a 401k to an IRA is a job change. But, your new job may also have an employer-sponsored retirement plan. If so, the best solution may be to transfer the funds from one custodial company to another. It’s possible that your new employer and your old employer may also use the same custodial company, which will really simplify matters.
Generally speaking, custodial companies allow you to invest in mutual funds or stocks. Sometimes, government bonds are offered to those who want to “play it safe”. Companies like T Rowe Price rank mutual funds according to risk, without actually providing advice. Of course, all funds are linked to the stock market, so there is always some risk involved.
The IRS allows retirement funds to invest in several other vehicles, including real estate. But, most companies that manage 401-Ks don’t allow investors to choose other options. Therefore, one of the reasons to rollover a 401k into an IRA is the ability to diversify the funds, investing in less traditional, more profitable, or less risky options.
To do this, you need a self-directed account. A custodian that allows truly self-directed investing will allow you to choose any number of options permitted under the tax code. You can choose from tax liens, publicly traded stocks, privately held stocks, structured settlements and, as I mentioned above, real estate.
Guaranteed ROI In Real Estate Investing? Yes, we are guaranteeing at least double ROI in the last year on our traditional investments like stocks, bonds and mutual funds etc. That’s right, double what you earned on your investment last year. Citi Capital does not guarantee how much money you will make, but they do guarantee that you will make at least double your ROI last year. I strongly urge you to verify this information yourself. This could be your path to financial independence in retirement.
Real estate is a good option for diversification as your investment is safe. The account owns something real, something that has real value. Yes, it’s value may change, it may decrease, but it is not affected by the company’s profits or other economic factors that can affect the value of a stock.
My client was asking about his reasons for rolling over a 401k to an IRA because he was unhappy with the returns he was getting on an annual basis. He used to think that there is no way to earn faster.
Let’s say you have $100,000 in your retirement account and it’s currently earning 10% per year. It hasn’t happened recently, but let’s say, for the sake of argument, you were earning that much.
If you took that $100,000 and bought a house, resold it for a $10,000 profit, then repeated that three times in a year, you’d be making a 30% return on your investment. Therefore, one of the best reasons to rollover a 401k to an IRA is to earn more and secure your retirement. Hope the question is answered. If you have a few minutes to spare, please feel free to browse through my website.
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