Your Old 401(k): Should You Move It to an IRA Before Retirement?

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Jan 27
2 min read

As retirement nears, many Texans ask: What should I do with the money in my old company 401(k)? Should I move it into a personal IRA account?

The best answer depends on your goals, how you want to handle taxes, what fees you're paying, and what special benefits your old company plan offers.

401(k) vs. IRA: A Simple Breakdown

Think of a 401(k) as a retirement savings box given to you by an employer. A Rollover IRA (Individual Retirement Account) is a personal savings box you open yourself.

Two Important Tax Rules to Keep in Mind

Moving your money can change your tax situation, so it’s crucial to understand these rules:

1. The "Must-Take-Out" Rule (RMDs)

When you reach age 73, the government says you must start taking small withdrawals, called Required Minimum Distributions (RMDs), from your pre-tax retirement accounts.

Key Insight: If you are still working for the company that holds your 401(k), you can usually delay these RMDs until you retire. If you roll that money into an IRA, you can't delay it.

2. Planning for Tax-Free Growth (Roth Conversion)

You can choose to pay the taxes now and move your money into a Roth IRA. This means all future growth and withdrawals in retirement are 100% tax-free. This is often much easier to manage in an IRA.

Working with a Fiduciary Advisor

At Texas Annuity Solutions, our advisors are fiduciaries. This means we are legally required to put your best interest first before our own commissions or any company's goals.

We review your entire financial life to provide you with clear guidance on the rollover decision. There's no sales pressure and no agenda, just straight talk so you can make a confident, informed choice about your future.

With a strategy session with a fiduciary advisor, you will be clear on

Which direction is best for your goals and needs
How much % should be converted to a Roth, and when, for maximum tax efficiency
How to efficiently rollover your 401(k) into an IRA or Roth IRA if it’s necessary

Get a Clear Rollover Roadmap.

Schedule your free, confidential 15-minute 401(k) Clarity Session. We’ll help you make the choice that supports your long-term security, not a sales quota.