00:00 Speaker A
The listener didn’t get this, but I get asked all the time from my kids and my kids’ friends if they should roll over their 401k when they change jobs. from former employer to new employer, to IRA, or leave? Tough choice, right?
00:20 Speaker B
Yes. I mean, maybe I’ll jump in there. I think, I mean, I see it through my employees, and it’s impressive to me today that I’m actually seeing employees more engaged in that conversation and communication. I think the challenge of losing an IRA and not simplifying is a huge problem. Most plan participants today have the option to bring their 401k. So whether it’s a rollover to an IRA or just a rollover to a new employer to keep it in one place, right? It’s, you know, retirement savings spaghetti in many different places. It ends up with people generally underinvesting, not remembering what they have, and I think they do
01:03 Speaker A
Lose what they had, right? Because they changed their email. postal address.
01:05 Speaker B
Exactly. I mean there’s a lot of like yeah especially and I mean we see that your email The email address when you leave school is likely to be different from your email address. the email address you use after 20 years.
01:14 Speaker A
And maybe deleted by your school.
01:16 Speaker B
I just think that the simplicity of being able to follow it is much better.
01:19 Speaker C
Yeah, I mean, it’s so bad that the Secure Act 2.0, that pension law we had just a few years ago, created the Department of Lost and Found Pensions. I mean, it sounds like a made up thing because it’s so stupid. But so many people fail to keep up and end up, you know, losing their retirement dollars. So I think your point is that most people are better off, whether it’s easier consolidation, just having to go to one place after retirement, required minimum distributions, or more efficient money management. Well, there are always exceptions to the rule. I mean, we’re here in New York today. New York school teachers automatically receive a 7% return if they choose the fixed option. Yes. right? This is very unique to this plan, but every plan has something a little different. If you get a 7% guarantee on a fixed option, there is no better bond option today. So that would be one of the exceptions to the rule where you might leave your money in the plan. That’s why we have jobs, right? Helping people make these decisions.
02:20 Speaker A
Everything is fine. So the reality is, and no names here, but a close friend, or should I call her? Uh says it’s just too hard to take money out of a former employer’s 401k. and roll them over to a new employer or into an IRA. She is overwhelmed by the process.
02:44 Speaker D
Yes, the most important thing is to stay with it, because it is your money and your life. Yes, of course, no one wants to give up money for any reason. I specifically say institutions. Um, it’s a process that goes on for quite some time. So get on the phone, figure out the forms, figure out who your key people are, document what’s going on, and follow up. It’s your money, it’s your future.
03:22 Speaker B
I want to double tap because it seems so long ago these days, but I know I was at JP Morgan for a long time, and when I left JP Morgan, I swiped my 401k. and I didn’t understand the documents myself. Like it’s complicated. So I called because I wanted to make sure it was done right. And I think those lifelines are there. Even those of us who are experts read these documents and they are not written for the layman.
03:57 Speaker A
So pretend you want to be a millionaire and you’re getting a phone for a friend, right?
04:02 Speaker B
Yes. Of course. Really. But don’t be, but these services are for you, right? Just use it.