Investor Education
8. Job Changes Happen!
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Job Changes Happen!
To stress again, it is important to understand the benefits of a Rollover IRA versus a taxable account when faced with a 401(k) distribution. The 401(k) vehicle has become the single largest source of retirement savings for average US consumers. Losing any of that valuable savings to taxes too early may severely effect your ultimate retirement goals. Don't think you will be faced with a 401(k) distribution soon? Think again.
As the chart above shows, the average number of years a U.S. employee is attached to one employer has fallen precipitously in the last 25 years. As of 2000, the average employee's job tenure per employer was only 4 years. Considering that most Americans work for at least 40 years, that amounts to a lot of job changes, and a lot 401(K) distribution decisions. Be sure to consider a Rollover IRA when faced with this decision.
*Illustrations shown and returns do not reflect the results or performance of any particular investment or mutual fund.
**The funds do not offer tax advice. Since individual tax situations vary, this strategy may not be suitable for all investors. Please consult your tax advisor to see how this information pertains to you.
***Shares of a mutual fund are not deposits of, or obligations of, or guaranteed by, any bank or its affiliates, nor are they federally insured by the FDIC. Investments in the funds involve investment risk, including the possible loss of principal.
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