Q: After working for SunTrust for 8 years, I am no longer employed with them. What is the smart thing to do with my 401k? Keep it with them or roll over to an IRA with another company/bank etc…
A: Thank you for your email.
The main answers to your question are cost and choice.
Although 401Ks are beginning to disclose their fees and expenses better, it is often hard to determine exactly how much you are paying from your investment returns to be invested through your employer’s plan. Often times, the costs inside of a 401K are more than you would incur if you went direct to a discount firm like Vanguard or Fidelity and opened and IRA and invested in low-cost index funds.
Depending on what you are looking for, you might feel like you are limited in the investment options inside of a 401K. The investments inside the 401K are chosen by a trustee within your company and you cannot invest outside of those options. If you open an IRA at a discount firm, you can choose from most any investment including individual stocks, index funds, mutual funds, individual bonds, etc.
If you would like to discuss your options further, feel free to give us a call at the office. We offer free one-hour consultations if you have more specific questions pertaining to your overall financial planning.