Retirement Fund Rollovers

I still have my Meta 401k even though it has been 2 years since I was laid off. The old dogma was that you should roll your workplace 401k into a rollover IRA after you leave, but in my case that would be a mistake. Meta folks, and really all FAANG folks, generic advice for you can often be flat out wrong. Three Main Reasons: 1. Meta's 401k plan is fantastic. It offers funds I can't get outside of the 401k and the fee's for the funds I can get are lower than publicly available! For example, they have a State Street Total Market Fund with an expense ratio of 0.01%. You can't beat that! One fee to be aware of is a tiny $23 per year record keeping fee. 2. Keeping my funds in the Meta 401k mean I am able to do the backdoor roth for $7,000 per year. This is separate from the 401k, but if I had a rollover IRA it wouldn't be worth doing due to the pro-rata rule. 3. Even if I didn't like the options available in the Meta 401k, they have a feature called Brokerage Link. This allows you to buy any funds you want. There are some other benefits around asset protection, but those two above are the primary ones. If someone gives you generic advice it might be wrong or outdated. The default for FAANG workers shouldn't be to roll over their 401k into an IRA. Personal finances is personal.

How Moving Pretax Funds Affects Future Retirement Contributions One move can change long-term compounding. Let’s be real: Retirement decisions aren’t just about where money sits today. They shape how your wealth grows, and how it’s taxed, for decades. Because one transfer can quietly change your entire financial trajectory. 1. Pretax Money Explained Contributions are made before taxes apply. → Taxes are deferred until withdrawal, allowing full-balance compounding. 2. Rolling Funds to an IRA Money moves from an employer plan to an individual account. → Investment control increases, but tax treatment depends on structure. 3. Contribution Limits Stay Separate A rollover does not reset annual limits. → Future contributions remain governed by IRS rules. 4. Tax Classification Can Change Pretax and Roth buckets behave differently. → Withdrawals may be taxed, or grow tax-free, depending on the structure. 5. Compounding Continues Funds keep growing after the transfer. → Better investment options and lower fees can improve long-term returns. 6. Risks to Watch Carefully Mistakes can trigger penalties or taxes. → Missed deadlines or improper rollovers can become costly errors. Retirement wealth isn’t just built by saving. It’s shaped by how intelligently you move and structure money over time. → Understand tax treatment → Protect compounding power → Avoid costly transfer mistakes Do you think most people understand how much rollover decisions impact long-term wealth? Follow me Marc Henn for more. We want to help you Retire Early, Supercharge Your Cash Flow, and Minimize Taxes. Marc Henn is a licensed Investment Adviser with Harvest Financial Advisors, a registered entity with the U. S. Securities and Exchange Commission.

I stopped a 28-year-old from making a $30,000 rollover mistake last week. His old 401(k) had two parts: Roth money (his personal contributions). Pre-tax money (employer contributions). He was planning to do a rollover because that’s what he read about online. Except it wasn't that simple. Rolling pre-tax 401(k) money into a Traditional IRA brings the pro rata rule into play. That rule means the IRS looks at ALL your IRA money and taxes your backdoor Roth contributions proportionally. Translation: one IRA rollover early in your career hinders your ability to do a backdoor Roth in later high-income years. For a high earner who can't contribute directly to a Roth IRA? That's a costly door to close. Here's what we did instead: → Rolled the Roth portion into his Roth IRA (clean, no tax issues) → Rolled the pre-tax portion into his NEW employer's 401(k) (keeps the backdoor Roth open) It's the same old account with two destinations... and a completely different long-term outcome. This isn't rare. I see this mistake almost every time a client changes jobs. The rollover paperwork looks identical either way. But the long-term consequences are not. Before you roll anything over, talk to your advisor. Not after. Before. Because the moves that seem like no-brainers are often where the real money gets lost. Have you ever made a financial decision that seemed obvious, until someone showed you what you were missing?

3 clients changed jobs this month. All 3 asked me the same question: “What do I do with my old 401k?” Here’s what we did that could save them thousands in taxes later. When you leave a job, you have 3 options for your old 401k: Option 1️⃣: Leave it where it is Most people do this by default. The problem? No control over investments. No flexibility for tax planning. And eventually, your old employer will send you a letter asking you to move it anyway. Option 2️⃣: Roll it into your new employer’s 401k Some people like this because 401ks allow borrowing provisions that IRAs don’t. The downside? You’re stuck with whatever investment menu your new employer chose. Most plans don’t offer strategic rebalancing. And they typically don’t allow conversions from pre-tax to Roth, which matters if you want tax flexibility down the road. Option 3️⃣: Roll it into an IRA This is what all 3 of my clients chose. An IRA is in your name. Full investment discretion. You’re not tied to a preset menu. And you can work with a tax professional on pre-tax to Roth conversions based on your income and tax bracket. Here’s why this matters: We’re now converting a large portion of their pre-tax IRAs to Roth. This could save them thousands in taxes later in life. Something we couldn’t do if their money was sitting in an old 401k. Sales leaders, tech executives, and business owners making $300K+ shouldn’t be leaving retirement accounts on autopilot at old employers. You worked hard for that money. Take control of it. If you want to learn more about strategies like this, I send out the High Earner Money Playbook 2x week. Sign up at www.dylangrocer.com. P.S. Did you leave a 401k at your old employer? What’s holding you back from rolling it over?

This guy I just met was given some bad advice for his situation.... He recently retired at 56, had been advised by another professional to roll over their 401(k) into an IRA immediately upon retirement (you know, because of all those advantages that an IRA rollover offers). Unfortunately, this decision meant missing out on the “Rule of 55” benefit—an option that allows penalty-free withdrawals from a 401(k) when you retire at 55 or later. And guess what, he needs income planning. Now he's stuck. This experience serves as a reminder that every financial decision carries long-term implications. The Rule of 55 can provide crucial flexibility for early retirees, offering access to funds without the burden of early withdrawal penalties. Had my client maintained their 401(k) as is, they would have retained this valuable option. As advisors, it’s our responsibility to ensure that every strategy is thoroughly examined and tailored to each client's unique needs. If you’re considering your retirement options, make sure you fully explore the benefits and potential trade-offs before making any moves. Sometimes it makes sense to roll the 401k and sometimes it doesn't. Easy on the trigger and take all things into consideration. #financialplanning #retirementplanning #401kplans

Had a phone call 📞 with a client recently where we rolled their 7 figure #401k into their new employer plan. Why didn't we put their 💵 in an IRA instead? Isn't it "easier to manage" if it's under our umbrella? 4️⃣ reasons..... ✔ Higher asset protection. Client is in a profession that tends to be litigious ⚖ (higher probability they get sued). The 401k has more robust protections against lawsuits compared to the IRA. ✔ Tax free growth. The client's income is way too high ⬆ to contribute directly to their #RothIRA. So we contribute to their traditional IRA first, then convert. However, if you mix tax deferred dollars with non-deductible dollars, part of the conversion becomes taxable. ❌ 🙅🏻♂️ By not rolling over the 401k funds to an IRA, we can continue doing #TaxFree Roth Conversions. 👍🏻 ✔ It's a good 401k. Their 401k has good investment options and a reasonable fee structure. ✔ We can still manage the money. Our firm is structured so that we can manage funds inside the employer's Retirement Plan. This allows us to make a decision that is in the best interest of the client. 👉🏻 Every situation is different when trying to decide what to do with your old employer plan. Each circumstance should warrant close evaluation 🔎 of your options and likely a discussion with an expert. #FinancialPlanning is more than just #Investments ________________________________________ 💡 Each week, I share financial planning observations from my day to day work in helping physicians with their finances. Read older posts in this series by clicking #AbacusForPhysicians.

$45,000,000,000,000 (yes, trillion) is locked in retirement accounts designed to keep you hands-off until 59½. For most people, that means decades of autopilot: Limited choices. Default allocations. Very little say in how capital is actually deployed. What many don’t realize is that a job change can create flexibility long before retirement age. If you’ve left an employer, you may be able to roll an old 401(k) into a Self-Directed IRA. That doesn’t mean cashing out. It means changing where and how the money is invested. A Self-Directed IRA can allow retirement capital to be allocated into: • Real estate • Private companies • Private credit • Select alternative assets Instead of being confined to mutual funds and target-date strategies. The benefit isn’t about taking more risk. It’s about intentionality. More visibility into what you own. More alignment with strategies you understand. More diversification beyond public markets. I personally focus on real estate — that’s my lane. But the takeaway is broader than any one asset class. If you’ve changed jobs, your retirement account may offer more flexibility than you’ve been told. DM me “401k” and I’ll share the questions I use to evaluate rollover and Self-Directed IRA options.

Most people don’t realize their retirement dollars can do more than sit in underperforming company accounts 👀 We’ve been working on a way for friends and family to use retirement accounts to access private real estate with much higher return potential than just their company's chosen index funds. Now we’re opening what we found to everyone. Here's how to use your IRA to invest in better, high growth (ofc, I'm not your tax advisor and certainly not your attorney. Check with your team to make sure this is a good fit for you.) 1. Understand What’s Possible Your retirement account isn’t locked into Wall Street mutual funds. With a Self-Directed IRA (SDIRA), you can roll over an IRA or 401k into an account that invests in private opportunities such as real estate funds like Out Partners, private equity, and even startups! Why this matters (even if you’re not in real estate): You get the benefits of real estate without managing tenants, all while taking back control of how your retirement grows. 2: How It Works 1. Open a Self-Directed IRA with a custodian (We found Alto is easy and low-friction) 2. Roll over funds from your IRA or 401k (tax-free if done right) 3. Direct the custodian to invest in the private fund you choose 4. Custodian handles IRS compliance and reporting 3: Why Professionals Get Excited With a self-directed IRA, you gain real control over your retirement. Your money is finally your choice. You also get access to real estate without the hassle of being a landlord, which means you benefit from the asset class without taking on property management. The growth is tax-advantaged, compounding either tax-deferred in a Traditional IRA or tax-free in a Roth. This approach diversifies your retirement, balancing the risk of your career and a stock-heavy portfolio with something more stable. Most importantly, it ensures your hard-earned money works in tangible assets that align with your long-term goals. 4: A Simple Example A physician with $400k in a hospital 401k rolls $100k into an SDIRA and invests in a private real estate fund. The money grows tax-sheltered, creating retirement wealth anchored in assets that produce income and appreciation. 5: The Big Picture IRA investing in private funds isn’t about becoming a landlord. It’s about: ✅ Taking back control ✅ Keeping more of what you earn ✅ Diversifying beyond your industry and the stock market ✅ Building a retirement you believe in Feel free to comment or DM if you have questions and want to know more

𝐓𝐡𝐞 𝟔𝟎-𝐃𝐚𝐲 𝐈𝐑𝐀 𝐑𝐨𝐥𝐥𝐨𝐯𝐞𝐫 𝐑𝐮𝐥𝐞: 𝐀 𝐂𝐨𝐬𝐭𝐥𝐲 𝐌𝐢𝐬𝐭𝐚𝐤𝐞 𝐭𝐨 𝐀𝐯𝐨𝐢𝐝 Many taxpayers assume they can complete multiple 𝐬𝐢𝐱𝐭𝐲-𝐝𝐚𝐲 𝐈𝐑𝐀 𝐫𝐨𝐥𝐥𝐨𝐯𝐞𝐫𝐬 in the same year. They can't. Under §408(d)(3) and the 𝐁𝐨𝐛𝐫𝐨𝐰 𝐯. 𝐂𝐨𝐦𝐦𝐢𝐬𝐬𝐢𝐨𝐧𝐞𝐫 decision, taxpayers are generally limited to 𝐨𝐧𝐞 𝟔𝟎-𝐝𝐚𝐲 𝐈𝐑𝐀-𝐭𝐨-𝐈𝐑𝐀 𝐫𝐨𝐥𝐥𝐨𝐯𝐞𝐫 𝐩𝐞𝐫 𝟏𝟐-𝐦𝐨𝐧𝐭𝐡 𝐩𝐞𝐫𝐢𝐨𝐝, regardless of how many IRAs they own. Here's what that means: • The 𝐟𝐢𝐫𝐬𝐭 60-day rollover is generally valid. • Any additional IRA-to-IRA 60-day rollovers within the next 12 months may become 𝐟𝐮𝐥𝐥𝐲 𝐭𝐚𝐱𝐚𝐛𝐥𝐞 𝐝𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧𝐬 and could also trigger the 𝐭𝐞𝐧 𝐩𝐞𝐫𝐜𝐞𝐧𝐭 𝐞𝐚𝐫𝐥𝐲 𝐝𝐢𝐬𝐭𝐫𝐢𝐛𝐮𝐭𝐢𝐨𝐧 𝐩𝐞𝐧𝐚𝐥𝐭𝐲, if applicable. The safest approach is to use a 𝐝𝐢𝐫𝐞𝐜𝐭 𝐭𝐫𝐮𝐬𝐭𝐞𝐞-𝐭𝐨-𝐭𝐫𝐮𝐬𝐭𝐞𝐞 𝐭𝐫𝐚𝐧𝐬𝐟𝐞𝐫. These transfers are 𝐧𝐨𝐭 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 to the 60-day rule or the once-per-year limitation. Also remember, 𝐫𝐨𝐥𝐥𝐨𝐯𝐞𝐫𝐬 𝐟𝐫𝐨𝐦 𝐚 𝟒𝟎𝟏(𝐤) 𝐭𝐨 𝐚𝐧 𝐈𝐑𝐀 are 𝐧𝐨𝐭 subject to the once-per-year IRA rollover rule. 𝐀𝐫𝐞 𝐲𝐨𝐮 𝐫𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝𝐢𝐧𝐠 𝐝𝐢𝐫𝐞𝐜𝐭 𝐭𝐫𝐚𝐧𝐬𝐟𝐞𝐫𝐬 𝐚𝐬 𝐭𝐡𝐞 𝐝𝐞𝐟𝐚𝐮𝐥𝐭 𝐨𝐩𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝐜𝐥𝐢𝐞𝐧𝐭𝐬 𝐦𝐨𝐯𝐢𝐧𝐠 𝐈𝐑𝐀 𝐟𝐮𝐧𝐝𝐬? #TaxPlanning #IRA #RetirementPlanning #IRARollover #TaxStrategy #CPA #TaxProfessionals #RetirementSavings #FinancialPlanning #USAccounting #TaxCompliance #IRS #WealthManagement #PersonalFinance #RetirementTax