For seven years, I wrote for a personal finance magazine, learning everything I could about investing and money management from more experienced journalists as well as hundreds of sources I interviewed for stories. Then In 2020, in the first big move of my career, I began writing for Grow.
Despite my background and knowledge, I made a financial goof when I switched jobs: I left my 401(k) sitting in my old plan instead of rolling it over into an IRA. I guess I had a little more to learn.
I had my reasons (which I’ll get into) for leaving my account where it was, and financial experts don’t believe doing so is a bad move in every single case. But by leaving my old 401(k) out of sight and out of mind, a huge chunk of my net worth was effectively out of my control — a fact that became crystal clear to me when I received a phone call from an unfamiliar number a few months ago.
My former employer had rolled my account, in cash, into an IRA for me.
Here’s what happened, and why, after nearly a decade of writing about money, I realize I probably made the wrong move.
Why I left my 401(k) money in my old plan
Working at a personal finance magazine comes with certain perks, one of them being a roster of mutual funds in the 401(k) plan chosen by a committee of people who write about investing for a living. I loved my portfolio. The mix of top-rated funds I chose struck a balance between growth and value styles, large and small stocks, domestic and international strategies, and active and passive management.
Portfolios I held in other accounts, such as my IRA, were built to complement this one.
So when I left that job, I thought, why mess with a good thing? It’s money I don’t plan on touching until retirement anyway.
Video by Ian Wolsten
That’s not an invalid line of thinking, especially for people who otherwise may be tempted to use the money for non-retirement purposes, says Jared Snider, a certified financial planner and senior wealth advisor at Exencial Wealth Advisors in Oklahoma City, Oklahoma.
“If you know…
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