Roll Your 401k Into an Existing IRA
Is it time for you to find a new job? If so, consider rolling your 401(k) money to a new qualified retirement plan. By doing so, you’ll avoid taking early distributions while the money will continue to grow tax-sheltered.
The best move you can do is to roll your money into a separate IRA, especially if you have an existing IRA. This is because that money will be protected from creditors. Here’s how it works!
Funds from your 401(k) are exempt from your creditors while only $1,283,025 of IRA assets are exempt from creditors under the Bankruptcy Abuse Prevention and Consumer Protection Act. The money that comes from a 401(k) into an IRA will continue to remain protected as long as they’re held separately from contributions originally made to an IRA. That’s why it’s important to move them to a separate account!
And there you have it! We hope this list helps you navigate what you can and can’t do with your 401(k). Leave a comment with your thoughts down below! Have you made any egregious 401(k) mistakes?
