A 401k is a retirement arrangement of employers to their employees. Employees are not required to pay income tax over the account unless it is withdrawn during the person’s retirement. When an employee decides to terminate his employment in a certain company, a 401k rollover takes place. The retirement fund will be transferred to another plan.

When deciding to move your retirement savings, it is important to look at all the options. A financial planner would be able to assist with moving your money as well as explaining any risks that may be involved with each option.

One 401k rollover option is to move the money from your employer-sponsored 401K to an Individual Retirement Account (IRA). With an individual retirement account, your money will remain tax deferred and you decide what types of investments are best suited for you based on your long term goals.

If you choose a brokerage or mutual fund company, you will have more investment options to choose from for your IRA. You may not have this kind of freedom in an employer-based 401k plan. It’s always up to you to choose your brokerage company, but I always suggest suggest finding someone that you can trust and that will get you to your retirement goals as fast as possible. This is your life savings though, so don’t just go with anyone off the street.

Another 401k rollover option is to move the retirement funds into a fixed or variable annuity. This would continue to provide an investment option with tax shelter benefits until retirement and would provide you with a guaranteed, steady income upon retirement.

Another option available is when you change employer and you want to move your 401k from your previous employer to your current one. The 401k will be assumed and will have to follow the available investment options and rules of the new account.

Now, you should look into 401k contribution limits for more information. You can find more tips and suggestions at 401k rollover school.

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