Know and understand your 401(k) options
401(k) Options
We'll help you determine where to put your money to work toward your retirement goals.
One of the reasons a 401(k) is great is because your assets are portable if you start a new job. Your rollover options typically include moving your assets to an IRA or your new employer’s retirement plan. Other options include taking a cash distribution or leaving the funds in your previous employer’s retirement plan. Each choice offers advantages and disadvantages, and you may engage in a combination of these options.
We recommend you discuss each of these alternatives for your 401(k) with one of our Wealth Advisors. They will work with you to help you identify which option is best for your retirement goals and current financial situation.
Meet an advisorCheck the background of this firm on FINRA's BrokerCheck.
401(k) Options
To help you decide which option is best, here are some pros and cons.
Roll over to an IRA
Pros
- The money will continue to grow tax-deferred.
- You may be given access to new investment choices.
Cons
- You can’t borrow against an IRA like you can with a 401(k).
- You may have to pay annual or other types of fees.
Leave your assets in your former employer’s plan
Pros
- You have time to decide before taking action.
- Your earnings remain tax-deferred until you extract them.
Cons
- You can no longer contribute to your former employee’s 401(k).
- The fees may be higher than what you’d pay with a new 401(k) account or IRA.
Roll over to a new 401(k)
Pros
- Any earnings you accumulate are tax-deferred.
- There’s a chance you can borrow against your new 401(k).
Cons
- There could be negative tax implications from rolling over your previous company’s stock.
- Your investment choices may be limited with a new account.
Take a cash distribution
Pros
- It’s always a good idea to have cash on hand, especially if there is a financial need.
Cons
- Sometimes the taxes and penalties are large for taking your 401(k) in cash.
- If you’re younger than 59.5, you will accrue a ten percent early withdrawal penalty that will be taxed as income.
Certificates
Get higher interest on a safe, low-risk certificate account. Investment terms available from 6 to 60 months.
Money Market Accounts
You can earn higher dividends than you would with a traditional online savings account.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Mountain America Credit Union and Mountain America Investment Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Mountain America Investment Services, and may also be employees of Mountain America Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Mountain America Credit Union or Mountain America Investment Services. Securities and insurance offered through LPL or its affiliates are:
This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financial U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.
Your Credit Union (“Financial Institution”) provides referrals to financial professionals of LPL Financial LLC (“LPL”) pursuant to an agreement that allows LPL to pay the Financial Institution for these referrals. This creates an incentive for the Financial Institution to make these referrals, resulting in a conflict of interest. The Financial Institution is not a current client of LPL for advisory services. Please visit https://www.lpl.com/disclosures/is-lpl-relationship-disclosure.html.
LPL Financial Form CRS.
| Not Insured by NCUA or Any Other Government Agency | Not Credit Union Guaranteed |
| Not Credit Union Deposits or Obligations | May Lose Value |
This site is designed for U.S. residents only. The services offered within this site are available exclusively through our U.S. Investment Representatives. LPL Financial U.S. Investment Representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.
Your Credit Union (“Financial Institution”) provides referrals to financial professionals of LPL Financial LLC (“LPL”) pursuant to an agreement that allows LPL to pay the Financial Institution for these referrals. This creates an incentive for the Financial Institution to make these referrals, resulting in a conflict of interest. The Financial Institution is not a current client of LPL for advisory services. Please visit https://www.lpl.com/disclosures/is-lpl-relationship-disclosure.html.
LPL Financial Form CRS.
