What To Do With Your Foremost Farms 401(k) Through the Transition To Kerry And BeyondMarch 21, 2018
By Jere Smith, CFP®, CLU®, Financial Advisor at Point Wealth, LLC
If you are a Foremost Farms employee in Rothschild, you know that a season of change is coming. During seasons of change, there are often a lot of decisions to be made as well. Will you remain in the same position? Should you apply for your same or different job with Kerry? Should you try for a different job? Should you cut ties and look for another job elsewhere?
This season of change that you’re experiencing is also a tremendous opportunity to do some long-range financial planning. One of the biggest financial decisions that you will be making in this season is what to do with your Foremost Farms 401(k) account. Let me walk you through the three options that you have moving forward and some of the things that you will need to consider as you make your decision.
Option #1: Leave Your Account With Foremost Farms
Usually, when you leave an employer, you don’t have to take your retirement savings with you. You can leave your money invested in your previous employer’s 401(k). So, whether you start employment with Kerry or find another job, you may have the option to leave your assets in the Foremost Farms 401(k) plan.
Option #2: Move Your Money To An IRA
Your second option is to roll the assets in your Foremost Farms 401(k) into an IRA. This option is available to you whether you start with Kerry or sever employment. With an IRA, you will have a number of choices, such as if you want to do a self-directed IRA or a professionally managed IRA.
Option #3: Transfer Your Money To The Kerry 401(k) Plan
This option is obviously only available to those who choose to start employment with Kerry. When your Kerry employment officially begins, you can roll your Foremost Farms 401(k) account into the 401(k) plan at Kerry. If you choose not to work for Kerry, but go to another employer, you may be able to roll your account into their retirement plan if they have one.
Things To Consider When Making Your Decision
There isn’t just one right answer regarding what to do with your Foremost Farms 401(k) money. There are a number of factors that you should take into consideration when coming to a decision.
Employer 401(k) plans offer a limited number of investments, while IRAs offer a wide range of investments and types of investments. Just because a 401(k) is limited does not mean it doesn’t have good investment options, though. It is important to review your options to ensure they will meet your long-term planning goals and investment strategies. An IRA can include many more investments that are not available in your company’s 401(k) plan.
Cost And Fees
The fees you pay for your investments can have a big impact on the amount of money you accumulate over time. It is important to compare the costs and fees associated with each plan and the investments available in them. You should also explore self-directed IRA strategies and how the cost associated with that compares to the 401(k) plans.
Roth IRAs provide tax-free growth and tax-free withdrawals in retirement. However, if you convert your money from a traditional 401(k) into a Roth IRA you will have to pay taxes on all contributions that year. If you are in a position to be able to take advantage of a Roth IRA conversion, that will likely have a big impact on your decision of whether or not to leave your money in a 401(k). It may be best, especially if you have a high income, to leave your money in a 401(k) until you are ready to do a Roth conversion.
Accessibility Of Your Money
Both the 401(k) and IRA have restrictions on accessing your money prior to age 59 ½. Depending on your circumstances, those restrictions could impact your decision on where to leave your money. With a 401(k), you can receive early distributions if you leave your job at age 55 and you can often take loans against your account as well. IRAs, however, have a much wider range of hardship clauses, making it easier to take out your money during difficult times.
How I Can Help
As you can see, there are a lot of factors that go into deciding what to do with your 401(k) account as you leave employment with Foremost Farms. And, the consequences of your decision can be significant, especially the farther you are away from retirement. In times like these, it can be very helpful to work with an unbiased professional that is an expert in investments and retirement savings.
At Point Wealth Management, we help people just like you make these kinds of decisions every day. We can help you decide the best account for your money to be in and the best way to invest that money based on your personal situation and risk tolerance. Call us at 715-870-2450 or contact Point Wealth Management in Wausau, Wisconsin by clicking this link to set up a complimentary consultation today. In seasons of change, it’s always nice to know that you have a true financial professional by your side who can help you navigate the uncharted waters.
About Jere Smith
Jere Smith is a financial advisor at Point Wealth Management, an independent financial planning and investment management firm. Serving individuals, families, and privately-owned businesses, he helps great people create great financial success through his services, including financial planning, retirement planning, estate planning, charitable giving strategies, and portfolio management. Along with nearly a decade of experience, he is a CERTIFIED FINANCIAL PLANNER™ professional and Chartered Life Underwriter, two of the most esteemed designations in the industry. He is passionate about education, whether it’s providing it to clients or adding to his own knowledge, and has written an article that appeared on FORTUNE.com. Based in Wausau, Wisconsin, Jere serves clients in multiple states. To learn more, visit http://pointwealthmanagement.com or connect with Jere on LinkedIn.
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