The Hidden Benefits of Having an Old 401K for Bartenders

Saving for retirement can feel out of reach for bartenders who may have worked in several places over the years.

However, if you’ve worked for an employer who offered a 401(k) plan, you might have an “old 401(k)” waiting to give your future finances a boost.

Here’s a look at some unexpected perks of keeping an old 401k for bartenders.

Tax-Deferred Growth

One of the best things about an old old 401k for bartenders is tax-deferred growth. This means that while your money sits in the account, it grows without being taxed year to year. This allows your savings to compound over time, meaning the longer it stays, the more it can grow.

Employer Contributions Remain Yours

If your old employer made contributions to your 401(k), those funds are yours to keep, even if you’ve moved on.

This could be an excellent boost to your retirement account. By keeping that old 401(k) open, you keep those employer contributions working for you.

No Immediate Tax Penalties

Withdrawing from a 401(k) before age 59½ comes with penalties and taxes. By leaving your money in the old 401(k), you avoid these penalties.

This allows you to let your money grow until you’re closer to retirement, keeping more money in your pocket for the future.

Option to Roll Over to Another Account

If you want to consolidate your retirement account, you can always roll over your old 401(k) into a new account or an IRA. This lets you manage your retirement money in one place, making it easier to track.

Some companies like Empower can help make this process simple. Get in touch with these companies and find your old 401(k) with Empowers help and get your finances organized.

Professional Management

Even if you’re not actively managing your old 401(k), it’s likely still being handled by professionals. This means your investments may be growing under a structured strategy that helps balance risk and reward, which is an excellent benefit if you don’t have time to manage the account yourself.

Access to a Loan Option

Some old 401(k) plans allow for loans, though this depends on the plan’s terms. If you’re in a pinch, this could be a useful option, letting you borrow against your retirement funds at a low interest rate. Be sure to check with your provider to see if this is available in your old 401(k) plan.

Avoid Higher Fees on Small IRA Accounts

If you roll over a small 401(k) balance into an IRA, you may face higher management fees or minimum balance requirements.

Keeping the money in the old 401(k) instead may help you avoid fees that could eat into your retirement savings.

Make the Most of Your Old 401k for Bartenders

An old 401k for bartenders is more valuable than it may seem at first glance. From tax benefits to potential loans, these accounts come with perks that could help you later on.

Take a moment to locate any old 401(k) accounts from past employers-find your old 401(k) with Empower’s help if needed- and set yourself up for a more secure financial future.

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