{"id":4506,"date":"2022-10-20T10:29:05","date_gmt":"2022-10-20T14:29:05","guid":{"rendered":"https:\/\/www.dupreefinancial.com\/?post_type=blogs&p=4506"},"modified":"2024-01-02T20:43:43","modified_gmt":"2024-01-03T01:43:43","slug":"7-reasons-you-should-transfer-your-retirement-plans-when-you-change-careers-at-40-2","status":"publish","type":"post","link":"https:\/\/www.dupreefinancial.com\/7-reasons-you-should-transfer-your-retirement-plans-when-you-change-careers-at-40-2\/","title":{"rendered":"7 Reasons You Should Transfer Your Retirement Plans When You Change Careers at 40"},"content":{"rendered":"

I heard you got a new job and are about to change careers at 40.<\/span><\/p>\n

Congratulations!<\/span><\/p>\n

My hat is off to you.<\/span><\/p>\n

You have worked for this moment.<\/span><\/p>\n

After countless networking events\u2026<\/span><\/p>\n

You\u2019ve held several interviews (oftentimes with the interviewer being wet behind the ears)<\/span><\/p>\n

And now finally, after what seems like an eternity, of searching and striving…\u00a0<\/span><\/p>\n

You are embarking on a new journey<\/span><\/p>\n

A new career\u2026<\/b><\/p>\n

A new life\u2026<\/b><\/p>\n

Pat yourself on the back, you deserve it.<\/span><\/p>\n

And now, the work begins.<\/span><\/p>\n

I know this time can be hectic as you transition to your new role.<\/span><\/p>\n

But, know this, you are not alone.<\/span><\/p>\n

In fact, the average age of someone who changes careers in 2022 is <\/span>39 years of age<\/span><\/a>.<\/span><\/p>\n

I realize there are many things that you need to do as you transition to this new role. One very important thing that often gets lost in the shuffle is your retirement plan from your soon-to-be former employer. As of May 2021, it was estimated that approximately <\/span>24.3 million forgotten 401(k) plans <\/b>were left with former employers and those assets equated to <\/span>$1.35 trillion<\/b><\/a>.\u00a0<\/b><\/p>\n

Wow!<\/b><\/p>\n

This alarming trend persists in the United States, and the amount of assets that employees leave behind with their former employers continues to grow.<\/span><\/p>\n

With all of the other things that you have going on right now, why should you not become just another statistic?<\/span><\/p>\n

Why shouldn\u2019t you leave your financial future in the hands of your past employer?<\/span><\/p>\n

There are several reasons why you should talk to an <\/span>investment advisor<\/span><\/a> about your 401(k) and other retirement accounts as you embark on this new journey in your life.\u00a0<\/span><\/p>\n

Take control of your financial future.<\/b><\/p>\n

You Might Forget You Have the Money When You Change Careers at 40<\/b><\/h2>\n

\"don't<\/p>\n

This might not seem possible right now. After all, you have been contributing to this plan for years. Over time, however, our minds move on to other things.<\/span><\/p>\n

Out of sight, out of mind<\/b><\/p>\n

Men and Women that change careers after 40 average 2.9 jobs for the rest of their working years. So, statistically speaking, this probably isn\u2019t your last rodeo.<\/span><\/p>\n

In 2018, Boston Research Technologies conducted a <\/span>survey<\/span><\/a> in which they interviewed 1000 inactive defined contribution plan participants. These inactive participants had left an employer and failed to rollover their retirement plans with a trusted advisor. Rather, they left the assets with their former employer. Fully one-third of those interviewed were unaware these funds existed.\u00a0<\/span><\/p>\n

And the forgetfulness grows over time. The longer it has been since you worked for this employer, the more likely you are to forget about these funds.\u00a0<\/span><\/p>\n

Don\u2019t let <\/span>your money<\/b> get lost in the shuffle.<\/span><\/p>\n

Your Risk Tolerance Changes When You Change Careers at 40<\/b><\/h2>\n

\"change<\/p>\n

Another often overlooked, or never considered, reason to take your money with you when you change careers is that you are now less likely to want excessive risk in your investments. You likely made investment decisions when you first started with your soon-to-be ex-employer and have not made any updates throughout your tenure. <\/span><\/p>\n

Don\u2019t let yourself remain invested in an old plan when you have new needs<\/b>.<\/span><\/p>\n

An <\/span>analysis<\/span><\/a> of over 30 million active defined contribution plans in 2021 revealed that fewer than one in twenty participants made any changes to the allocation of their contributions. This fact is in stark contrast to the reality that a major life change occurs, on average, every <\/span>12-18 months<\/span><\/a>. If you have been with your current employer for 10 years or longer you have likely had six or seven major life changes.<\/span><\/p>\n

You May Become Overweight in Your Former Employer\u2019s Stock When You Change Careers<\/b><\/h2>\n

\"leaving<\/p>\n

In total, approximately <\/span>4.5%<\/span><\/a> of all 401(k) assets are invested in the stock of the employer. But many 401(k) plans are very heavily concentrated in the equity of the company.\u00a0<\/span><\/p>\n

As recently as 2016, Sherwin-Williams employees had <\/span>62%<\/span><\/a> of their retirement assets invested in company stock. The company may want to \u201cCover the Earth\u201d, but they might also want to spread their employees’ assets around the Earth as well.<\/span><\/p>\n

This company was not alone in this extremely high concentration of company stock in its employees’ retirement plans. And there is a legitimate reason for this phenomenon. Many retirement plans have a company match. Rather than use cash, employers can use their own stock to fund the match.\u00a0<\/span><\/p>\n

Back in 2016, Colgate Palmolive employees were 56% invested in company stock. And the list goes on:<\/span><\/p>\n