When you change jobs or retire, you’ll want to decide what to do with that old 401k plan from your previous employer. You really have 3 good options - leave it there, roll it over to your new plan if you’ve changed jobs and your new employer offers a 401k, or you can roll it over to an IRA. But how do you know which option is right for you? 

So this week, I’m teeing up for you 5 questions that you’ll want to ask before you do anything with that old 401k. 

Today’s question that you’ll want to ask before touching that old 401k is: Do you need protections that the 401k plan can provide. 

An interesting rule about 401k plans is that the money inside your 401k is protected from creditors if you file for bankruptcy. 

If you are concerned about your credit and think it’s likely you’ll file for bankruptcy in the foreseeable future, you may consider leaving the money in your old 401k plan, and not rolling it over to an IRA. Since the money is protected inside of a 401k, but not in an IRA. It’s a funky rule and it should be the same across all retirement accounts, but leave it up to Congress to make things complicated. 

My point is that knowing this rule in a bankruptcy situation can potentially shield your precious retirement assets from creditors in a deep, dark bankruptcy situation. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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