A Common Mistake for Rolling Over Your 401k

How often do people keep jobs in the United States these days? According to www.forbes.com, only 4.4 years. In addition, according to money.usnews.com, the average worker, will work until age 67. This means that the average person might switch jobs 11 times during their career!

The only real reason to have a 401k is if your employer matches your contribution. However, when you leave your job, don't roll your 401k into your new company's 401k. The reason is that each time you rollover your retirement account, there are naturally fees associated with liquidating your various positions. If you end up switching jobs 11 times, you will end up paying these fees 11 times. It is not uncommon for people to believe they are not charged fees within their 401k, but this is not the case.

It is better to own a personal IRA, because in general, you will have lower fees and more control. A side benefit is that when you leave, typically, the fees may jump even higher than those while you were working for the company. It is not uncommon to hear stories of a $2,000 retirement account accumulating so many fees, that eventually, there was nothing left for the employee.

Do yourself a favor. When you leave a company, take your money with you.

Have you encountered this financial mistake? We'd love to hear your story and as usual, thanks for visiting! We appreciate each and every one of our readers.

This post was reposted from http://finlit.biz/retirement-2/a-common-mistake-for-rolling-over-your-401k/, originally written on November 28th, 2013.