Rolling your investment into your new 401(k) or an Individual Retirement Account (IRA) can provide you with many additional benefits. You may receive new investment options (perhaps ones you’ve never had before), you can continue to contribute to the plan, you can see all your retirement assets in one place—and more. If you are changing jobs, talk to your human resources department about rolling over your assets, to help ensure it is done in a timely and accurate manner.
Needing access to your assets
There are many reasons you may consider liquidating your retirement plan, but this is almost never a good idea if it can be avoided. Even if you are thinking about paying off debt, consider that any interest you may be paying on it is likely not as much as the taxes and penalties you may incur if you cash out your retirement assets.
One important thing to remember about 401(k) plans is that they typically offer the option to take a loan of up to 50% of your account balance. If you need liquid funds, this may be a smart move, as you pay yourself back, interest and all, over time.
Retirement plans are long-term vehicles, and they work best as such. On the path to your retirement goals, it is critically important to remain invested.
This post was republished with permission from the WisdomTree blog.