Broker Check

12412 York St., Thornton, CO 80241

(720) 379-8665
info@bighornwealth.com
Schedule a Meeting

401(k) Rollovers

Professional Retirement Planning with Bighorn Wealth Management

Planning for your financial future involves making informed decisions about your retirement savings. One significant aspect of this planning is understanding 401(k) rollovers and the available options.

Understanding 401(k) Rollovers

A 401(k) rollover occurs when you transfer the funds from your current employer-sponsored 401(k) plan into another retirement account. This process allows you to consolidate your retirement savings, potentially offering better investment options, lower fees, and simplified management of your retirement assets.

401(k) Rollover Options

When considering a 401(k) rollover, you have several options: 

  • Roll Over to an IRA: Individual Retirement Accounts (IRAs) often provide a broader range of investment choices and potentially lower fees than employer-sponsored plans.
  • Roll Over to a New Employer’s 401(k): If your new employer offers a 401(k) plan, you can consolidate your retirement savings by rolling over your previous 401(k) into the new plan.
  • Leave the Money in Your Old Employer’s 401(k): Some plans allow you to keep your funds in your former employer’s 401(k) plan. This option may be suitable if the plan has good investment options and low fees.
  • Cash Out: While this option gives you immediate access to your funds, it’s generally not recommended due to the potential taxes and penalties, along with the loss of retirement savings growth.
401(k) Rollover Rules

401(k) Rollover Rules

Understanding the rules governing 401(k) rollovers is crucial to avoid unnecessary taxes and penalties:

  • Direct Rollover: The safest option, where the funds are transferred directly from your old 401(k) plan to the new retirement account. This method avoids tax withholdings and penalties.
  • 60-Day Rollover: If you choose to receive the distribution yourself, you have 60 days to deposit the funds into a new retirement account to avoid taxes and penalties. Failure to do so within this timeframe may result in significant tax implications.
  • Required Minimum Distributions (RMDs): If you’re over the age of 73, you must begin taking RMDs from your retirement accounts. Rollover transactions do not negate this requirement.

Colorado 401(k) Mandate

Colorado has implemented a mandate that requires employers to offer a retirement savings plan to their employees. This mandate aims to increase retirement savings and ensure more residents are financially prepared for retirement. Understanding how this mandate affects your 401(k) rollover options is essential, especially if you’re navigating employment changes within the state. Bighorn Wealth Management can help you understand how local laws affect your retirement savings accounts. 

Making the Right Choice for Your 401(k) Rollover

Making the Right Choice for Your 401(k) Rollover

Choosing the right 401(k) rollover option involves careful consideration of your financial goals, investment preferences, and the specific rules and mandates in your state. By exploring your options and understanding the associated rules, you can make an informed decision that aligns with your long-term retirement strategy.

For personalized assistance and to explore the best options for your 401(k) rollover, contact us at Bighorn Wealth Management. Our team of experienced financial advisors is here to help you navigate your retirement planning journey.