Avoid Common 401(k) Pitfalls When Changing Jobs: Best 401(k) Rollover Options

Transitioning to a new job is an exciting milestone, but amidst the excitement, it’s crucial not to overlook your existing 401(k) plan. Mishandling your 401(k) during a job change can lead to significant financial setbacks.  

According to The Bureau of Labor Statistics, “people hold about 12 jobs throughout their working lives,” so you’ll likely be faced with this challenge sooner or later.  

Here’s what you need to know to protect and potentially enhance your retirement savings. 

4 Common 401(k) Rollover Pitfalls to Avoid: 

1. Cashing Out Early: Approximately one-third of workers cash out their retirement accounts when leaving jobs. For individuals aged 20 to 30, this figure rises to over 41%. Cashing out not only incurs immediate taxes and penalties but also sacrifices the compound growth your investments could achieve over time. 
2. Leaving Funds with Your Former Employer: While it might seem convenient to leave your 401(k) with your previous employer, this approach has drawbacks. You may forget about the account, lose track of it, or be limited by the investment options available in that specific plan. 
3. Rolling Over to Your New Employer’s Plan: Transferring your old 401(k) to your new employer’s plan can streamline your retirement savings. However, it’s essential to compare the fees and investment choices between the two plans to ensure you’re making a beneficial move. 
4. Making Rollover Mistakes: 
   When moving your money, you can request a direct rollover from your former employer to your IRA or a transfer to a new 401(k) plan. This helps you avoid unnecessary taxes and penalties. If you take possession of the funds, you risk missing the 60-day deadline to redeposit the money into a tax-advantaged account, potentially triggering hefty tax consequences.  

Why Consider a 401(k) Rollover to an IRA?: 

Many financial advisers recommend rolling over your 401(k) into an Individual Retirement Account (IRA). This option often provides a broader range of investment choices. 

Traditional 401(k) plans typically limit you to conventional assets like stocks and bonds. In contrast, a Crypto IRA allows you to diversify your portfolio by investing in digital assets. Cryptocurrencies have demonstrated substantial gains compared to traditional assets, offering the potential for significant growth. 

For instance, in the first 11 months of 2024, a hypothetical portfolio containing equal parts BTC, gold, GameStop, and DraftKings returned 62%, more than triple the returns of a traditional portfolio of 60% stocks and 40% bonds.  

Why Choose BitcoinIRA¹

BitcoinIRA offers a secure and user-friendly platform to roll over your existing 401(k) into a Crypto IRA. With BitcoinIRA, you can: 

• Diversify Your Investments: Access a wide range of over 75 cryptocurrencies and tokenized physical gold to complement your retirement portfolio. 

• Benefit from Tax Advantages: Enjoy the same tax benefits as Traditional or Roth IRAs, with the added growth potential of digital assets. 

• Maintain Control: Make informed decisions about your retirement savings with a self-directed platform designed for ease of use. 

Don’t let your hard-earned retirement savings become an afterthought during your career transition. Consider the advantages of rolling over your 401(k) into a Crypto IRA with BitcoinIRA to take control of your financial future.