Our goal is to offer some great tips and help you along your financial journey.
And sometimes the best tips aren't so much about what to do but what mistakes to avoid along the journey.
Today we want to talk to you about why cashing out your 401k is typically a mistake.
A recent study by the Harvard Business Review found that over 40% of people cash out either a portion or all of their 401k when they're switching employers.
If you are in a transition, you have several options, and draining your account typically isn't the best one.
By cashing out, you’re canceling the opportunity for that money to continue growing over time, and you're setting yourself up to have to start all over once you start your new job.
Consider other options like leaving your money in the plan or rolling it to a new plan or an IRA, and those give your money a chance to continue to grow towards your retirement goals.
Even a $10,000 account when simply left alone and invested from age 28 to 68 could be worth over $142,000 by the time you retire.
So, the question becomes, would you rather have $10,000 today or over $140,000 at retirement. It's an important decision.
Most of us will have up to eight jobs in our lifetime.
The way I look at it, that's eight chances to practice leaving your money invested and avoid that decision to cash out.
If you want to become a 401k Superhero to your future self, stay committed to keeping those 401k dollars working toward your retirement goals.
If you have questions about old 401k accounts and you just want to talk it through, we're more than happy to go over your options with you.
Click on the button below and let's schedule a time to talk today.
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