Preparing and putting away for retirement is extremely important.  In this current economy, many people are either leaving or losing their jobs along with their employer-sponsored benefits.  If you are one of the many that has experienced this situation, and have a 401k that you are unsure how to handle, consider a 401k rollover to Roth IRA accounts.  While in most situations you 401k can remain in the employers hands, most choose to rollover their 401k to make it easier to manage in the future.  In most cases, the only reason an employee should elect a 401k over a Roth IRA is when their employer has contribution matching incentives.  When these incentives are no longer available, take your money elsewhere and take advantage of the lifelong benefits of a Roth IRA.

Investors commonly wonder what makes a Roth IRA vs 401k so appealing.  One great feature of the Roth is that it is tax-free growth for a lifetime.  Because investors are making contributions of after tax dollars, there are no worries of the IRS taxing contributions later in life when you should be in a higher tax bracket.  Another benefit is that withdrawals can be taken from your IRA account tax and penalty free if the qualifications of this are met.  The ability to stretch distributions over one’s lifetime is another feature that has gained a lot of interest in various avenues of investment.

The switch from a 401k to a Roth IRA has never been easier since the passing of the Pension Protection Act of 2006.  Previously prohibited, owners of 401k’s can now easily convert employer-sponsored balances of their 401k to new and existing Roth IRAs.  This new act has made it even easier for individuals to convert balances directly into an account.  This act has made the process easier and more beneficial for Americans to make contributions to their retirement.