The reason so many people like 401k retirement plans is because the employer matches a certain percentage of what the employee contributes.
However, what the employer will match will usually a set percentage and once that amount is met, many people wonder what to do from that point on.
Once you reach the point where your employer will no longer match your contributions then you have the choice of investing your money into a Roth IRA.
A Roth IRA will allow you to keep contributing money that is available after taxes, however the amount will continue to grow tax free.
This is a great opportunity for someone to continue the growth of their retirement savings.
According to the new tax laws, those who have a 401k plan can directly turn it into a Roth IRA.
Years ago, the process would have been much more lengthy and complex.
This is why turning your 401k plan into a Roth IRA has just recently became an option that people are looking into since it is much easier than before.
Just remember that withdrawing funds from a Roth IRA will mean a 10% penalty charged to you when you pay back the amount taken out.
However, even a 401k plan charges interest when funds are removed before retirement.
For those who do this rollover within 60 days will be charged a 20% fee, however those that do it immediately will not have the fee.
Therefore, it is best to do so immediately.
Most importantly work hand in hand with a financial advisor on this task.
There are numerous rules about transferring to different plans, and it is best to have someone on your side that understands the law.
In addition, the financial professional may be able to tell you other investment options, such as a Traditional IRA instead of a Roth IRA.
You need to weigh your options carefully and choose the most financially sound option.