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After retirement, you need to decide whether you should roll over your 401k to an individual retirement account. Once you are no longer working at a company, it's often a good idea to move your money to a retirement account that is not tied to your former employer. Here are seven reasons to roll over your 401k to an IRA:

Cashing out is a bad idea. On each withdrawal you'll have to pay tax (marginal rate) on the lump sum and a 10% penalty if you're younger than 59 1/2. It's better to take distributions over many years to minimize the tax. Delaying withdrawals as long as you can also gives your retirement fund more time to grow.

Lower fees. Your 401k plan has administrative fees that will cut into your investment returns over the years. If you roll over your money to an IRA, you may be able to avoid paying administrative costs, especially if you don't sign up for investment management at a brokerage. Also, some 401k plans charge an extra maintenance fee once you are no longer an employee. Check with your company to see if this fee applies to your plan.

401k changes. Your 401k investment choices, trustees and fees can change at any time. If you are no longer working, you might not get the latest information as quickly as those who are. When big changes are scheduled to occur, the employer usually holds information sessions to communicate the changes. If you don't work there, these in-person sessions may not be available to you. If you don't pay close attention to your 401k statements, you might not be aware of the changes until after they occur.

More control. Most 401k plans have restrictions. My previous employer did not allow me to invest the employer-contribution portion of my 401k account. This portion is invested in a "global diversified" investment that has no ticker. I'm not willing to live with these restrictions now that I'm no longer an employee. I want total control of my investments, and that's why I'm in the process of rolling over my 401k.

Employer stock. It's hard to believe, but many workers still have a large portion of their 401k's invested in their employers' stock. Some companies invest their employer contribution directly into company stock. This is a bad idea, because there are too many eggs in that basket. If your employer goes out of business, you could lose not only your job but also your retirement savings. Read up on Enron if you think investing in your employer's stock is a good idea.

Better investment choices. Most 401k plans have limited investment choices. Unfortunately, many of these funds have high fees and high expense ratios. If you roll over your money to an IRA, then you can invest in anything you want to. Some investors might want to invest in individual stocks, and that's easy to do in an IRA. I'm partial to low-fee Vanguard funds, and I can pick any of them in an IRA.

Consolidate and simplify. Workers who frequently change jobs can end up with several 401k accounts if they don't roll them over. It's much easier to check on your investments if they are in one IRA instead of many 401ks. A single IRA also makes it much easier to revamp your investments. You will be surprised at how much you are paying in fees as your 401k balance grows.

There are many things to deal with when you leave your job or career, but don't forget about your retirement account. This could be your largest investment if you work with one employer for a long time.

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