Any suggestions what to do with 401K earnings after job eliminated

Mr. Ed

Mr. Ed

Be what you is not what you what you ain’t
Location
Central NY
I have less than $6000 from previous job. Suggestions how to save or reinvest?
 

I rolled it over (directly) to an IRA which I control. Do not have the money go to yourself or you will immediately owe taxes on it. Use the financial advisor to give you the forms to do it this way, then you do not need to have withdrawals until you are 72.
 
funsearcher! said:
I rolled it over (directly) to an IRA which I control. Do not have the money go to yourself or you will immediately owe taxes on it. Use the financial advisor to give you the forms to do it this way, then you do not need to have withdrawals until you are 72.
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That's what I did when I was younger and doing my taxes. I did not claim it as income and the IRS let me know about it. Penalty was 5% of the amount as I recall.
 
I too would recommend that you roll it into an IRA. Can you take the hit and put it in a Roth IRA? Do you have any other investments? Talk to those people or even your bank/credit union. Keep adding to it along the way, if you can. We had several small pensions that we ultimately took as a full payout and invested. They add up to a nice amount, altogether now.
 
I agree with @funsearcher! Direct rollover. If you don't already have a brokerage in mind, I highly recommend Schwab. I've dealt with about nine brokerages over the decades including Vanguard and Fidelity. I like Schwab way better. They have a large variety of choices and several no fee funds and ETFs, not just Schwab's but other companies as well. There site is also very user friendly with many handy tools.
 
I think it kind of depends on where your $6,000 resides. I have a 401k with Fideltity. When I retire in a few months, I will probably just leave it there. I like their funds. I also have another investment fund with MetLife that has about the same amount as your 401k.

Do you like the funds at the financial company you are with? Would you rather have more options than you currently have? If so, maybe roll it over to an IRA.
 
Definitely put it in an IRA. With a little research, a person can find funds that return a historical 5 to 10%....depending upon, your "risk tolerance"...far better than any money sitting in a bank. The Only thing that makes me mad about the 401k/IRA plans is that they didn't exist until I was well into my working career. Had they existed when I first started working, And I had been wise enough to invest, we'd now have a 7 figure net worth.
 

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