Cramer on Retirement: What to Do With Old 401(k)s
NEW YORK (TheStreet) -- If you're leaving a job, or worse, suddenly laid off, the last thing on your mind is your retirement account. You mean to get around to rolling your money over into an IRA, but the world has turned upside down and you're faced with more urgent priorities such as beginning a painful job search or grabbing the best retirement options.
No wonder 32% of workers leave their retirement savings in their former employers' 401(k) plans. Employers love it when you do nothing. The more assets a plan has, including money from former employees and retirees, the easier it is for sponsors to negotiate with plan providers for better terms and lower fees.
But that's no reason to let them keep your money hostage.
Here are just a few reasons why you should take charge and roll that money over today:
"With your 401(k) your investments are limited to whatever the plan offers," says Judith Ward, a certified financial planner with T. Rowe Price. "With an IRA you can have an account anywhere and you've got whatever investment choices you want."
More choices means you can more effectively diversify your retirement savings and offset the choices in your current employer's plan by using individual stocks or investments in asset classes such as real estate, commodities or energy that aren't always available in company retirement plans.
Plus, you'll be able to invest in high-growth stocks such as Walt Disney(DIS) and McDonald's(MCD) , two holdings in my Action Alert PLUS portfolio that promise better returns than the plain vanilla mutual funds most 401(k)s offer.