It is Career Friday here on shadow news when we
share our top tips and advice for job seekers.
And today we want to talk about what to do
with your retirement savings. When you do switch jobs
, most Americans will switch jobs several times during their
career. So what should you do with your old
401k when you get a new job? Joining me
now is Bobby Rebels certified financial planner and founder,
a financial one, this strata consulting firm, Bobby
. It's great to have you on the show as
always. And what are the options out there for
people who are looking to switch jobs? Well,
first of all, thank you for having me as
always. This is such a great topic. Um
The good news is you can move your money,
it's your money no matter what. But I do
want to remind people especially if you're leaving a job
in voluntarily that this money is yours, but it
is meant to be For retirement. It is not
your emergency fund. So resist the temptation to take
the money out the best solutions and we'll talk about
them is to make sure it stays in whatever kind
of tax protected account it's in already and you have
lots of great options. Okay. Very good advice
.$5,000 kind of seems to be the threshold here
. Bobby, walk us through this$5,000 threshold when
it comes to deciding what to do with your money
. Exactly. So if, if you have a
balance below$5000.01 thing that could happen is your current
, your now former employer, I should say,
can choose to give you that money. And that's
where it's really important to make sure that you keep
it sheltered. So ideally, you can do a
direct rollover into a vehicle like an IRA that will
still protect it. Or if you have your new
job already into your new companies, 401k, you
might want to choose a four oh one K or
by the way, you can keep it there.
If it's above 5000, you might want to 401k
because there are protections put in place in 401k is
that you don't have an IRA, for example,
if you were to have an unfortunate situation with bankruptcy
and so on, you also have, it's sort
of a little bit easier with a four oh one
K because you have fewer options and then you don't
have to worry about who's going to manage it.
And Ira, the good news is you have more
options. But of course, then you have to
figure out how to make those more. You have
more options, you have to figure it out.
You have to get someone to give you the advice
or make the decisions yourself. So it becomes a
little or D I Y or hands on or at
least you got to outsource it to someone that's gonna
help you out. Okay. So let's talk about
how to approach investing for retirement. Bobby. Of
course, some people, they try to buy the
market bottoms, they try to get in on some
of the meme stocks. Others people just kind of
set a plan called dollar cost averaging and they get
in bit by bit as a certified financial planner.
How would you suggest that people approach using their money
to invest in their retirement plans? I would look
first at your own personality and see what makes you
comfortable. We all have had a lot of practice
recently if you watch each other, which hopefully everyone
does all the time and you see how much we've
seen the market volatility if that makes you uneasy and
you get really nervous and you're tempted to pull your
money out, you may want to put it in
, you know, maybe a more diversified fund where
you don't have individual stocks where you can take a
step back and resist temptation. If you have,
you know, a little more tolerance for the risk
, maybe you can take more risks. So it's
important to understand who you are. Also know that
even though we've talked so much about stock investing because
we've had inflation, we also have some really attractive
options when it comes to fixed income. Even things
like C D s that we hadn't thought about so
much I bonds, which do move with inflation ways
where you, you can get a guaranteed return without
the risk of the volatile stock market if that doesn't
fit your personality. So I know who you are
. So, Bobby, of course, another investment
mechanism can be H S A dollars F S A
. Another thing that you might be able to take
with you, perhaps you're the expert here, if
you do switch jobs, what do we know about
what can be transferred with an F S A in
an essay? The best question, unfortunately, with
an F S A, that's a flexible spending account
that use it or lose it the H S A
um that gives you, so that's a health spending
account, health savings account. I should say that
gives you so much more flexibility and something that is
been amazing for so many people because it can effectively
become a retirement account when you put money in that
. And when you're company puts money in the H
S A, that is your money and it is
portable and it's great because if you need to use
it for medical expenses, you're gonna have those tax
protections. And if you're gonna be able to leave
it and invest it. It's gonna grow basically tax
free forever unless as long as you use it within
the rules, which are basically medical expenses for your
lifetime. So S A R A really attractive option
for many people and it's just a great vehicle for
retirement savings. Bobby Rival, certified financial planner,
founder and Financial on the strategy. Bobby. Thank 00:04:33.334 --> you.