3 Reasons Why You Should Use an IRA

It happens to almost everyone of us. When we quit a company that we’re working for, we have to move the money that was a part of our 401k plan. Experts believe that it is better to move this amount to a retirement account for several reasons rather than cashing out, and most of these reasons pertain to building a nest egg, which you would definitely need, when you retire. So, here are three reasons why you should use an IRA, which isn’t tied to your employer:

#1: Lower Fees
One reason why an IRA is a better place to put your money is because of lower administrative fees, which has to be paid, if you have a 401k plan with your employer. In most cases, you might also be able to avoid these fees altogether if you don’t opt for an investment management at a brokerage.

#2: More Control
To say the least, a 401k plan has restrictions that isn’t on an IRA. In some case, being able to invest the employer contribution amount is not allowed in a 401k plan. However, if you rolling over your money into an IRA, you don’t have to put up with these restrictions – even if that amount is invested in a ‘global diversified’ investment.

#3: Simplify
If your line of work requires you to switch jobs, then you might end up with several 401k accounts. So, in order to simplify, it is a good idea to consolidate the money in all these accounts in one IRA.  This makes it so much easier to manage your money in the long run, and avoid the fees that you’ll have to pay when using several of these accounts.