Many employers throughout the U.S. offer their employees a company-sponsored retirement savings plan called a 401(k), named after section of the U.S. tax code. Through these 401(k) plans, you are able to contribute some of your salary before taxes are taken out. and, in some cases, your employer may make its own contributions on your behalf to enhance the amount you save towards your retirement.
Typically, these 401(k) plans are managed by a custodian or investment bank chosen by your employer and can be an excellent way to cost-effectively save for your retirement. But what happens when you change jobs and no longer work for that company?
What do do with your 401(k) after you change jobs
In these instances, you have three options:
- Leave your existing 401(k) plan in place.You will no longer be able to make contributions to this, since you no longer work for company which sponsors the plan;
- Roll over your existing 401(k) plan to a similar plan offered by your new employer; or
- Roll over your existing 401(k) plan to an Investment Retirement Account (IRA).
There are no bad choices with these options as, in all cases, you preserve the special tax treatment afforded these investment vehicles.
But, as we have discussed in previous articles, rolling over your existing 401(k) into a self-directed IRA allows you to choose how and where to invest your retirement funds, which includes investing in the Foreign Exchange (Forex or FX) market.
Self-Directed IRAs allow you to trade FX
If you are looking to control your financial future and invest in the FX market, converting your old 401(k) into a self-directed IRA is the way to go. Fortunately, the process is relatively simple..
To get started, you would want to set up a self-directed IRA with one of the custodians that permits Forex investments. Then, instead of making a contribution of new funds into your IRA, you would work with your IRA custodian to roll over your existing funds from your 401(k) plan custodian.
Within a few days, you will be in a position to actively control your retirement funds and invest them at your discretion.
Former government employees who contributed to a 403(b) or similar government-sponsored retirement plan can also convert those funds into a self-directed IRA and invest in the FX market. The process is nearly identical to converting a 401(k) plan into an IRA.
Forest Park FX helps convert your 401(k) plan into a self-directed IRA for FX trading
For more information on how to convert your old 401(k) into a self-directed IRA, or how to trade FX through your existing Traditional IRA or Roth IRA, please contact firstname.lastname@example.org.
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