Did you know that you can rollover a 401k (or more than one) if you are unhappy with the results it's producing?Maybe you do not agree with what your employer invests in, or you just want to expand your investing options.
This article will discuss why you should rollover a 401K to a Roth IRA, the advantages of doing so, and what estate planning with IRAs entail.
One of the biggest advantages you gain when you rollover a 401K to a Roth is investment flexibility.
Where a 401K is typically limited to whatever your employer offers, a Roth allows investment in many different stocks, bonds, mutual funds, and even other alternative investments like real estate.
This way, you can have a more diverse account, which gives you both less risk that all will go bad at one time and more opportunity for greater returns.
Roth IRAs have a few more important benefits when it comes to estate planning with IRAs.
You get to pass money that is tax-free to your heirs, as long as you have the account for at least five years.
Also with a Roth, you are not forced to withdraw any money at any certain time in your life unlike a traditional IRA.
This means you can keep your contributions tax free, and even pass these tax free dollar to your loved ones.
As mentioned above, traditional IRAs force you to accept distributions at 70 1/2 years old, meaning you may have no funds left to pass on to your heirs.
There is also no age limit for making payments, so you can continue to make contributions for as long as you wish.
Did you know you could rollover any type of retirement vehicle (401K, solo IRA, traditional IRA, etc.
) into a self-directed Roth IRA?Why would you do this?It would greatly expand your investment decisions, but it also gives you sole responsibility of what happens with it.
This is the part of self-directed IRAs that usually scares people off; the responsibility part.
But if you harness this power of self-directing your retirement account along with estate planning with IRAs, you will most likely experience greater returns, if all is done correctly.
People that elect to invest some or all of their retirement funds in real estate use self-directed IRA accounts.
There are custodians out there that make this kind of investing almost effortless, while you sit back and collect interest checks.
And if you put these checks back into your self-directed IRA, they are tax-free and your account continues to grow.
It's definitely a great way to secure your future, or the futures of your loved ones.