00:00 Speaker A
It didn’t come in from a listener, but it’s a question I get all the time from my children and my children’s friends is when they switch jobs, should they roll over the 401K from their former employer to their new employer or into an IRA or leave it behind? Tough choice, right?
00:20 Speaker B
Yeah. I mean, maybe I’ll kind of jump in there. I I think, I mean, I I see it through my own employees and what really impresses me today is I actually see employees being more active in that conversation and consolidating. I think the challenge of having lost IRAs and not simplifying is is a huge problem. Most plan participants today do have the option to bring their 401K to their new employer. And so whether it’s rolling over to an IRA or just rolling it to the new employer, keeping it into one place, right? This spaghetti of, you know, retirement savings in lots of different places. It ends up with people typically being under invested, um not remembering what they have, um and and I think it makes
01:03 Speaker A
Losing track of what they had, right? Because they changed their email address.
01:05 Speaker B
Exactly. I mean there’s a number of these like yeah, particularly and I mean we see this like, you know, your email address when you come out of school is likely different than the email address you’re using 20 years later.
01:14 Speaker A
And maybe deleted by your school.
01:16 Speaker B
I just think simplicity, so that you can track it is so much better.
01:19 Speaker C
Yeah, I mean, it’s so bad that Secure Act 2.0, that retirement bill that we had just a few years ago, created the Department of retirement lost and found. I mean, it sounds like a made-up thing because it’s so silly. But that’s how many people are not keeping track and and end up, you know, losing track of their dollars in retirement accounts. So I do think to your point that most people are better off, whether it’s for easier consolidation and just when you get to retirement age, required minimum distributions, only having only having to go to one place, whether it’s managing the money in a more efficient manner. Uh but there’s always exceptions to the rule. I mean, we’re here today uh in New York City. New York City school teachers get an automatic 7% return if they go into their fixed option. Yeah. right? Like that is very unique to that plan, but every plan is has something a little bit different. If you’re getting 7% guaranteed in your fixed option, there’s not a better bond option out there today. So that would be one of the exceptions to the rule where maybe you do leave your money in the plan. It’s why it’s why we have jobs, right? Is to help people make these decisions.
02:20 Speaker A
All right. So the reality of it is, and no names here, but um a close friend, should I call her? Uh says it’s just too hard to to take the money from my former employer’s 401k and move it into either my new employer or into an IRA. She’s overwhelmed by the process.
02:44 Speaker D
Yes, and the key is is staying with it because it’s your money and it’s your life. Yes, of course, no one wants to give up money for for any reason. I’m specifically saying institutions. Um and it is a process that has been going on for quite some time. So get on the phone, find out the the forms, figure out um who your key people are, document what’s happening, follow through. It’s your money, it’s your future.
03:22 Speaker B
I want to double tap on the get on the phone because it seems so old school these days to say that, but I know um so I worked at JP Morgan for a long time and when I left JP Morgan, I rolled over my 401k and I did not understand the paperwork myself. Like it was complicated. And so I got on the phone because I wanted to make sure it was done correctly. And I think those lifelines are there. Um even those of us that are experts are reading this paperwork and it is not written for the average human being.
03:57 Speaker A
So pretend it’s like uh who wants to be a millionaire and that you get a a you get a phone a friend, right?
04:02 Speaker B
Yes. Sure. For sure. But don’t be but these services are here for you, right? Just take advantage of it.