Amidst the COVID-19 outbreak, millions have lost their jobs and have dormant 401K or 403B retirement accounts sitting at those former employers. Dustin Stanley, financial planning advisor of Strategic Wealth Designers joined WDRB in the Morning to discuss what the best options are for those who hold dormant retirement accounts.
Whether you have switched jobs or unfortunately been laid off, Stanley says you can look at it as an opportunity. “It could be a 401k, 403B or Thrift Savings Plan, any retirement account from your former employer, you can rollover that account to an IRA which gives you a lot more control. Typically your employer’s plan will only give you 10, maybe 20 funds that you can use, when you rollover the options are limitless of how you invest that IRA.”
With the CARES Act, there are some scenarios now where a person would be allowed to withdraw cash from those dormant retirement accounts without having to pay penalties. Stanley cautions against doing this though, “I do not recommend withdrawing the money into cash unless you absolutely have to.” Those who have moved jobs or lost their position can move the money over to an IRA without any tax penalty as long as it is done within 60 days of leaving the previous position.