5 Reasons to Rollover a 401k to an IRA

Mike Iredale
November 7, 2008 — 1,997 views  
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The global and American economy are in bad shape right now, just about every asset class you invest your retirement superannuation fund into are getting smashed!

Ask yourself these questions? Will you retire in 5 years or 30 years? Are you investing for the short or long term? Do you need one or multiple retirement plans? Will you use one or diversify into multiple asset classes? What investment experience do you have? Do you need a financial advisor or professional help? Can you make enough money given your time frame to retirement? The following 5 reasons to rollover a 401k to an IRA may help you answer these questions.

Reason #1 Do nothing different to what you are doing now, and you will get the same result your getting now! Seems like a pretty logical statement. The point is if you want a better result than your getting with you existing 401k, you need to take some positive steps and make changes both to your thinking and the actions you are prepared to take.

Reason #2 If you're like the average worker you will move jobs several times during your career. This gives you some good reasons to rollover a 401k to an IRA, or even to multiple self directed IRAs. The reason for doing this is to diversify your investments and assets into various classes, therefore minimizing the risk of big losses with any one investment, and increasing your chances of getting a better ROI on your money.

Reason #3 Whether it be shares, bonds or real estate they all go through cycles, they go up over a few years, then they go down usually much quicker for a few years. The present cycle is a little different and out of balance because of the extremes in the financial sectors. However, you still need to invest your money for your retirement, you can't just sit on the sidelines and wait for years for things to settle, particularly if your retirement timeframe is short.

Reason #4 The global economical turmoil is forcing investors to be more creative in looking for secure places for their money that can deliver better ROI. With regular 401k plans you are restricted to investing in what your employer, the funds trustee or custodian decide is best for that plan, you have no say in the matter. One of the best reasons to rollover a 401k to an IRA, particularly a self directed IRA is to have control over where you're hard earned money is invested.

Reason #5 With the help and guidance of experienced professionals you can roll your 401k into a self directed IRA or self directed Roth IRA, this enable you to invest in most asset classes. If you don't already have investments in real estate, a self directed IRA account opens the door to this kind of investment opportunity giving you greater diversity and reduces risk. The ROI on certain real estate investments at the moment is far greater than regular diversified funds.

Finally, we all know today's financial situation is pretty bad. However, we also know the world will not end tomorrow, things will get better given time, it always works that way and it will again. In all this turmoil, there are always opportunities if you're prepared to diversify and change your conventional thinking. If your retirement plans aren't moving forward as quickly as you would like, look for new opportunities you haven't considered before.

About the Author

Mike Iredale researches retirement investment strategies, and is experienced in residential and rental property investments. Selecting a self-directed IRA real estate turnkey solution, can be one of the best strategies and options available for in-experienced investors in todays financial environment. visit my website at http://www.big-ira-profits.com to find out who can help you get the best results

Mike Iredale