What are some good reasons to roll over a 401k to an IRA? One of my clients asked that question recently. So, I frowned, then looked at the ceiling and thought about it.

All retirement accounts have advantages. Some have disadvantages. In the best case, an employer sponsors a plan that makes matching contributions, allowing you to grow your fund faster than you could on your own. That’s what you get with a 401-K; The best case.

But, since they are employer-sponsored plans, one of the reasons to roll over a 401k to an IRA is a job change. But, your new job might also have an employer-sponsored retirement plan. If so, the best solution might be to transfer the fund from one escrow company to the other. Your new employer and your old employer may even use the same escrow company, which would really simplify things.

Generally speaking, custodial companies allow you to invest in mutual funds or stocks. Government bonds are sometimes offered for those who want to “play it safe.” Companies like T Rowe Price, without actually offering advice, rank the mutual funds they offer based on risk. Of course, all funds are tied to the stock, so there is always some risk involved.

The IRS allows retirement funds to be invested in a variety of other vehicles, including real estate. However, most companies that administer 401-Ks do not allow investors to choose other options. So one of the reasons to roll over a 401k to an IRA is to have the ability to diversify the fund, investing in less traditional, more profitable, or less risky options.

To do so, you need a self-directed account. A custodian that allows for a truly self-directed investment will allow you to choose any option allowed by the tax code. You can choose tax liens, publicly traded stocks, privately owned stocks, structured settlements, and as I mentioned earlier, real estate.

Guaranteed ROI on a real estate investment? Yes, we offer a guaranteed ROI of at least double what you earned on your traditional investments such as stocks, bonds, and mutual funds, etc. last year. That’s right, double what you earned on your investments last year. City Capitol does not guarantee how much money you will earn, but it does guarantee that you will earn at least double your ROI last year. I strongly recommend that you review this information for yourselves. This could be the path to financial freedom in retirement.

Real estate is a good option for diversification because your investment is safe. The account holds something real, something that has real value. Yes, that value can change, it can go down, but it’s not affected by company earnings or other economic factors that can affect a stock’s value.

My client was asking about the reasons for transferring a 401k to an IRA, because he was not satisfied with the returns he was getting annually. He wondered if there wasn’t a way to earn more, faster.

Suppose you have $100,000 in your retirement account and you currently earn 10% per year. That hasn’t happened recently, but let’s assume, for argument’s sake, that you were earning that much.

If you took that $100,000 and bought a house, resold it for a $10,000 profit, and then repeated that three times in one year, you’d be getting a 30% return on your investment. So one of the best reasons to roll over a 401k to an IRA is to earn more and secure your retirement. I hope that answers the question. If you have a couple of minutes to spare, feel free to browse my website.