"I left my employer, but I've heard that I need to diversify, so I'm going to spread out my accounts. I'll keep my 401(k) there and separate from my other investments."
A client said this to me recently. That thinking is probably very common! But since the investments are in the same stock market, that's not what is meant by diversifying assets.
There are many considerations, but she will have to work twice as hard over multiple accounts in the coming years to keep her investments in line with her evolving risk tolerance.
You have options when you leave a company, on what to do with your old 401(k)! Let's talk!
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Disclosures: thrivent.com/social
Disclosures: There may be benefits to leaving your account in your employer plan, if allowed. You will continue to benefit from tax deferral, there may be investment options unique to your plan, fees and expenses may be lower, plan assets have unlimited protection from creditors under Federal law, there is a possibility for loans, and distributions are penalty free if you terminate service at age 55+. Consult your tax professional prior to requesting a rollover from your employer plan While diversification can help reduce market risk, it does not eliminate it. Diversification does not assure a profit or protect against loss in a declining market.
