Moving Jobs? Take Your Retirement Fund with You

Returns chart for insurance policy
Photo by s_falkow

How many times have you changed jobs?  Three, four, five, or more?  Each time you change jobs, do you make sure to take your retirement with you?  If you are young and only employed briefly, do you just pay the penalties and instead cash out the retirement and pocket the money?

We live in a mobile society, and our jobs are no different.  Take one job, work for a few years and then take a different job with a higher salary or a better position.  In this mobile society, there are a few things to consider in regard to your retirement fund.

1.  When will you be vested?  Many companies say employees are vested after 5 years.  (This varies, though, so check with your company’s Human Resources office.)  When you are vested, the company will often match your retirement contributions.  If you have contributed $54,000 and you become vested, your retirement fund will jump to $108,000 thanks to being vested, and every contribution you make from then on will be matched by your employer.  If you are considering leaving your job and are close to being vested, most of the time it is worthwhile to stay until you become vested.

2.  Take your retirement with you.  Most people are intimidated by the idea of taking their retirement account with them, so they just leave the money in their employer’s retirement fund.  This is often a mistake, and most financial advisers recommend that you take the money with you.  You can roll over the retirement money to another retirement account with no penalty.  You can do this yourself or you can get free pension transfer advice at Pensionlite or another company.

3.  Invest in your own retirement fund.  While it is good to have retirement accounts through your employer, don’t forget to open up your own personal retirement accounts.  If your earnings are under $110,000 and you file as a couple, you can contribute $5,000 per year to a Roth IRA.

Changing companies to improve your salary or position is advantageous to your career.  Just don’t forget to take your retirement with you.

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