Joe Oberting of Napa, Calif., is the Johnny Appleseed of 401(k) plans.
He realizes how important it is to keep his retirement savings growing, even when he changes jobs, but he sees nothing wrong with leaving his money to flourish in separate pots.When you switch jobs you have several options for your 401(k) money. You can roll it into an IRA or, if the new company allows it, into your new 401(k) plan. Or, if you have at least $5,000 in your account, you can leave it in your old plan.
Over the past few years, Oberting has had to decide several times what to do with his 401(k) money.
When MCI bought Oberting's employer, SHL Systemhouse, in 1995, he decided to leave the money in the old 401(k) -- now worth more than $38,000 -- and start a new one with MCI.
He had amassed $53,000 in that account when EDS bought his division last year. Again he decided to let his money sit in the old account because he liked the investment choices and the funds' performance. The account is now worth more than $115,000.
"It's a way to diversify my investments without paying any management fees, and I have access to my accounts by phone or the Web," Oberting explains.