• Carrie B. VanWinkle, CFP®

Leaping from Corporate to Your Own Business: What to Do About Those Retirement Accounts

Are you taking the leap from your corporate or nonprofit job to start you own business? What to do about your retirement account can be stressful and overwhelming, but an important detail to address during the transition.

With so many other things going on, many people end up ignoring their 401k, IRA, and other types of retirement accounts. Sometime these accounts are neglected for years.

So what’s the big deal? Why bother doing anything at all?

  • Because TIME is your friend with your investments. Investing in a way that makes the most of the time that you have before retirement can really make a different in your overall retirement savings. I had a client recently is retiring soon and came to me to help with his preparations to retire. I discovered that one of his ‘old’ 401k accounts was primarily in cash for at least the last 10 years. He was disappointed and surprised. He knew that that large portion of his retirement savings should have been invested for the last 10 years, working for him.

  • Simplify – bring your accounts under one umbrella. Ideally all of your retirement and investment accounts are on one statement, making it easier to keep track of everything. Working with one person to help you with your financial big picture can make a difference as well.

  • 60 days or else….you might HAVE to. If you’re like me, you might get a letter from your former HR department mandating you do something in the next 60 days or they’ll mail you a check, which would could trigger penalties and fees. This happened before I became a financial planner, and was very stressful. I wasn’t sure who to turn to for help. When I tried to do it myself, I got overwhelmed. I ended up feeling desperate and worked with someone who was not a good fit for my needs and values.

  • Attention – money goes where attention flows, right? Well ignoring your retirement savings often means you’re not contributing, no one is doing an annual rebalance of your account, and no one is checking to be sure the investment strategies are in alignment with its purpose and your goals.

During this time to taking the leap, you don’t need to be stressing about what to do with your retirement.

Here are the three steps to transitioning your retirement when you take the leap:

Match, Move, Align.


Two things you’ll want to match:

First, match your need to who or what will help you.

A fee-only financial planner keeps things clean and simple. You might decide to work with an insurance agent or a stock broker. You may work with an investment professional at your bank. You might decide to take the DIY route and use something online and do it yourself. There are pros and cons to each of these options. Be sure you ask about fees, how they are paid (if they say it’s free, it’s not), and learn about what’s ‘in their toolbox’ of options.

Second, match your current retirement account(s) with a new and appropriate account. If you are working with a financial planner/advisor, they will be able to determine this for you.

For example, a 401k is matched to a Traditional IRA (Individual Retirement Account). The matches are determined by the IRS. A Roth 401k is matched to a Roth IRA. Other types of accounts that roll into a Traditional IRA include 403(b)s, 457bs, and SEP-IRA.

Once we have a match, then the new accounts are opened.


It’s now time to move your retirement funds from the old to the new account(s). This is called a transfer or a rollover. You want the funds to go directly from your old account(s) into your new account(s) if possible.

If you are working with an Advisor, they will help a lot with this process, doing a lot of the heaving lifting on your behalf.

If you are doing it DIY, be persistent and firm about the process for directly rolling the funds from one account to the other. Often, the current custodian will try to simply mail you a check. If mailing you a check is the only choice, be sure they DON’T make the check out to you. They should make the check out to the new account custodian, like “Charles Schwab and Co.”, for example.


Once the funds are in your new account(s), it’s time to align your values and your risk strategy with how the funds will be invested.

How do you align your values? There are many options for socially responsive investing now, where your values regarding the rights of women, LGBT employees, human rights around the world, environmental issues, health issues (like GMO’s), can be supported. An advisor who specializes in socially responsive investing can help you with this process.

Align your risk strategy to your investments. With retirement accounts, the purpose of these funds is to provide financial freedom, choices, and security for you later in life. This may be 20 years from now or 2 years from now. Your investment strategy should reflect the timeline for how soon you will be using the funds. This is called the ‘time horizon.’

Your Advisor will help you walk through this step. If you are going the DIY route, there may be some guidance on this with the new custodian of your retirement funds.

Working with the right advisor can take the stress off of your shoulders. Whether you choose to do this yourself or work with a professional (we do this work every day, so we can navigate the bumps and turns of the process more easily), remember these three steps: Match, Move, Align.

#retirement #rollover #retirementaccounttransfer

© 2020 by Carrie B. VanWinkle, CFP® | Natural Investments. LLC. | 1927 Harvard Drive, Louisville, KY 40205