Christine wrote me with this question:
I have worked several different jobs. I have retirement money affiliated with each employer. I am considering consolidating to one new account, but I am confused on who to invest with and what type of account to open? Your suggestions would be greatly appreciated.
Christine, you have a few basic options to consider:
- Leave your money in your former employer's plan, if your former employer permits it.
- Roll over your money to a new 401(k) plan, if this option is available.
- Roll over your money to a Traditional IRA.
- Roll over your money to a Roth IRA.
- Take a cash distribution.
First, be sure it is to your advantage to move the money from your former employer’s 401(k) plan. It you are allowed the same options and controls over the account as an existing employee, it may be to your benefit to leave the money where it is. Ask a professional financial advisor to help you analyze this option.