John, good to see you today I have an important question, what should I do with my old 401k?

And the reason I'm asking is because 41% of people from 2014 to 2016 actually cashed out part of their 401k When leaving a job, and of those 85% cashed out the entire thing. So, we're going to walk through a few options, some better than others, but the first option is John, you could simply cash it out.

Yes, and this is my favorite or my least favorite option, I should say, you know, why are you cashing this out? And really, the answer has to be it's got to be for an emergency, especially if you're a retirement. If you're cashing it out, it has to be for an emergency, or it has to be adding some type of tremendous value to your current situation. You know, perhaps you're funding a, a new venture or whatnot. But regardless, if you're going to cash out, be mindful that you're just adding to your tax liability. So hypothetical example, you're cashing out 100,000 on a 401k. You just added $100,000 of additional income. So, if this is an option that you must do maybe even considered doing cash out over the two years, right, maybe November or December cash out, and then one more in January? Yeah, that's good point. All right. Another option would be to simply leave it with your old employer. Yeah. So, if you're changing jobs, and you're illegal with your old employer, the I only recommend doing this if you really like your old 401 K plan. I like to say that our participants in the 401 K plans that we handle, were given them investment options that they probably haven't seen in some model so I can see them perhaps staying with our 401k If they were to leave the company, but you want to make sure that if you compare your old company to the new company, if you're going to make that decision and be mindful the fact that one of the major advantages to a 401k is that you're able to continue to contribute no matter what the markets and it down market, that's very powerful. So, you're not going to have that option with your old employer. 401k. I will say this if you're retiring, and I have had some clients that they retire when they're 56, 57 years old, they'd have the option to take tax or penalty free, penalty free not tax free, but tax penalty free distributions upon separation at age 55. So that may is often a reason that we will keep some money with an old 401k When retiring.

Okay. All right. And the third option would be to roll that old 401k into your new employer's plan. Yeah, again, this goes back to what we said you want to compare the two obviously, you know, with your new employer, you have the ability to make contributions have plan and you know, give that plan a little bit about a boost because of your contributions. But you always want to know is the grass going to be greener on the other side with a new 401 K plan?

And then the last option, John, I'm assuming is your favorite would be to roll the 401 K into an IRA. It is my absolute favorite. And listen, not only do you have the ability to have professional advice, which is my favorite thing, because that's what I love to do. I love to deliver massive value to my clients. But even if you're a do it yourselfer, you still have the option of 10s of 1000s investments versus just a couple of investments and you can do more advanced planning like tax management planning and those other things. Just be mindful again, if you're a young retiree, if you the one thing you need to be aware of is if you roll that money into an IRA, aside from a complex 72 T which we're not even going to get into her. You can't touch that money until you turn 59 and a half. So again, if I have young clients that are retiring at 57, we may roll a portion of that money from their old 401k into an IRA, but we will leave an emergency fund or a cost-of-living fund in that old 401k, so they still have access to it tax penalty free.

John, thank you clearly a lot of options, some better and more complicated than others. And like you mentioned, having a conversation with a professional is such a value add if somebody has questions about what to do with their old 401k How can they get a hold of you? Yes, listen, rollovers that's a specialty so absolutely get advice. Before making your decision. As always, we encourage people to visit our website www.go securus.com. We have a list of resources on our website for free information for people to learn from. And from our website, you can go to our contact us page and you can schedule a 15-minute phone call to answer any questions, or you can schedule a complimentary vision and clarity consultation. But if you also don't like using the internet, and you want to give us a call at the office 858-935-6210 We'll be more than happy to schedule an appointment for you. All right, John, thank you very much. Thank you, Erin.