Think you already know what to do with your 401k when you retire?

You might want to think again because the wrong decision with this could potentially cost you many thousands of dollars over the course of your lifetime. Now, here's the thing with 401Ks. I'm a financial advisor, and me and other advisors I work with over just the past few weeks, I've talked to many different clients about what to do with their 401ks, and there was not one single answer that fit appropriately for everyone. There's many different potential things you can do.

And so what I'm going to do with their 401ks, and there was not one single answer that fit appropriately for everyone.

There's many different potential things you can do. And so what I'm going to do today is explain

the various factors involved, various considerations, and explain which one might be most

relevant, giving your situation so you can make the right decision for you. The reason this is

so important is that for most retirees, their 401k is going to be their largest retirement asset. So if you don't get this decision right, the impact of that could cost you dearly. So let's walk through the different factors that you need to consider when deciding what to do with your 401k. To start, let's talk about when you should not roll over your 401k, because typically your options are going to be, do you keep your money in your 401k, or do you roll over to an IRA? There are some other

things that you can do, but those are the two main options. Here's why you wouldn't want to

move money out of your 401k. Number one, if you're retiring, but you're not yet age 59 and a half,

but you are over the age of 55. If you have a 401k with a company

that you are working at in the year in which you turn 55, you actually have different rules

for when you can access that money penalty free. If you have an IRA, you can't touch that money

until age 59 and a half, with very few exceptions. But with a 401k, that rule is actually turned to 55 if you're

working at the company that you have that 401k through when you retire. So, for example,

you're 56 years old, you want to retire, you have all of your money in that company's 401k.

You think that you can't touch money until you're 59 and a half, but that's only if you were to take those 401k assets and enroll them to an IRA.

Because you are already age 55 or above, and because you're currently working at that company, you could retire from that company and pull money from that 401k without the 10% penalty.

You still owe taxes, but you remove the 10% early withdrawal penalty.

So this option can provide you a lot more flexibility for those of you who are not yet age 59

and a half, but want to retire in your 55 or older with the company that the 401k is through. Why do I say

that? Well, if you're 55 and you have your 401k with this company, but you have a previous

employer who you also have an old 401k through, you can't touch that 401k until you're 59.

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