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How To Rollover Your 401k 馃捀 (4 Simple Steps) - YouTube
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so what we're going to be talking about
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in this video today is how to roll over
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your 401k now a lot of people are like
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clueless when it comes to retirement
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accounts and the different things that
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you can do and they have these old 401ks
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that may be sitting around that they
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just don't know what to do with and one
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of the options that you have is to
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rollover your 401k either into your new
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401k or you can actually roll this over
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into a couple of different retirement
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accounts and that's what we're going to
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explain in this video is what you can do
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with that old 401k from a previous job
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and also you know wise you may want to
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actually rollover a 401k in the first
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place so the first thing that we have to
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understand here is that not all 401ks
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are created equally some 401ks are
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really good investments that hold you
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know low fee index funds or low fee
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investments in other 401ks are loaded
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with fees and they are just not good
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investments and then is one of the
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problems with the 401k is that there are
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all kinds of different plans out there
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and unfortunately whatever provider your
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employer picks you are stuck with that
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particular plan so if it's a good plan
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then you are in good luck but if it's
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not a good plan there's pretty much
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nothing you can do except for rollover
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that 401k into a different type of
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retirement account that you may have
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more control over so one of the things
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that you can do with a 401k is to roll
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over a dad or old 401k into a different
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type of loafie IRA and I'll show you
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guys a couple of examples of that or
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options and a little bit and then you
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basically have to transfer the funds
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from this old 401k into a new IRA or
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another 401k within 60 days to fall into
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the IRS limit here otherwise you will
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get charged a penalty and the taxes
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associated with dipping into that 401 K
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early so you definitely want to make
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sure that you do this in a timely manner
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to fall within that 60-day window but
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the very first thing you have to ask
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yourself when you are looking to
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rollover a 401 K if you are going to be
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opening a new account is basically where
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are you going to open this account and I
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have two different recommendations I'm
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going to
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to you guys number one if you're looking
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for the best low fee retirement account
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option out there in my opinion that is
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going to be M one finance they offer
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completely fee free retirement accounts
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and the minimum balance to open an
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account with them is just five hundred
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dollars and they also have a very easy
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rollover process if you do decide to
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rollover a 401k to M one finance and
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open up an IRA over there so that in my
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opinion is the best option for a fee
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free option for a 401k rollover now if
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you are looking for a fully managed
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portfolio my second recommendation is
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going to be betterment which is actually
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a robo advisor now they charge a small
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asset management fee of 0.25 percent
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which is still a lot lower than what
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you're going to pay to a traditional
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in-person financial advisor and the
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advantage to using betterment is there
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are a number of different advantages
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such as tax coordinated portfolios and
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they also fully manage your portfolio
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automated they rebalance it they take
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care of all those other aspects that you
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may not want to deal with as an investor
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so betterment in my opinion is the best
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option for a low fee yet managed
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approach to a rollover and I'm going to
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include links to both m1 finance and
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betterment in the description below
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these are affiliate links you don't have
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to use them if you don't want to but I
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certainly do appreciate it as it helps
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to support my channel and allows me to
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make more videos like this and I'll also
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include reviews to both m1 finance and
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betterment if you want to learn more
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about both of these investment options
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okay so after you go ahead and figure
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out where you're going to open your new
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account the next thing you want to ask
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yourself is basically what type of
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account do you want to open and the
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first thing I want to point out to you
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is that you may not actually have to
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open up a new account at all because if
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you already have an existing IRA with
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somebody else
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maybe fidelity maybe its Vanguard
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whoever it's through if you already have
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an IRA you may be able to just
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consolidate these two accounts and roll
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that 401k into an existing IRA so if you
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like to keep things simple and you
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already have an IRA somewhere else one
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of your options is to reach out to that
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tution and asked them if you can
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rollover your 401k into that existing
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IRA if you don't have an IRA that's not
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a problem like I said you can open one
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with m1 finance or betterment or any
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institution out there but these are the
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different accounts you can potentially
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open enroll your 401k into the most
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common way to do it is to roll your 401k
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into just a traditional IRA you're not
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gonna pay any taxes it's going to be a
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relatively simple process option number
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two is to rollover your 401k into a Roth
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IRA and that's going to be a slightly
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more complicated process because what
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you have to do in that case is roll your
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401k into a traditional IRA and then do
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what's called a Roth IRA conversion and
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when you do this you're going to have to
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pay taxes because it's a different type
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of account moving from a 401k or
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traditional IRA to a Roth IRA but there
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are definitely some tax benefits
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associated with that so you do want to
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consider that option of whether or not
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you want to open up a Roth IRA instead
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of a traditional IRA and it's important
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to note here that both betterment and m1
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finance both offer the Roth IRA option
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and the traditional IRA option the next
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option you have which is probably not
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going to be common is to roll your 401k
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into a SEP IRA that's a specific
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retirement account for people who are
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self-employed so maybe you left a job to
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go start your own business and you've
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set up a SEP IRA
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one of the options you have is to roll
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that old 401k into that and then finally
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let's say you left your job and you're
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working at a new job now well you can
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roll a 401k into another 401k all you
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would do is reach out to your new 401k
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provider and ask them for instructions
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on that process so I would say 90% of
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the time what you're going to be doing
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is just rolling your 401k into a
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traditional IRA unless you want to roll
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it into your new employers 401k that's
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going to be an option for you as well
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doing the SEP IRA is not very common and
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even if you do decide to roll your 401k
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into a traditional IRA down the road you
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can make that decision to do a roth IRA
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conversion where you go ahead and pay
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the
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access and convert that to a Roth IRA
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and you may want to talk to a financial
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adviser about the tax benefits or tax
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implications of that move okay so the
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third step after you've figured out
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where you're going to open an account in
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what type of account you're going to be
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opening is going to be figuring out your
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investing strategy so if you want to be
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a self-directed investor that's somebody
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who's actually picking the investments
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themselves I would definitely recommend
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m1 finance because that allows you to
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put whatever you want within that IRA if
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you want it to be ETFs if you want to
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invest in Vanguard bond ETFs if you want
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to invest in individual stocks you can
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do that within your IRA through m1
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finance you pick and choose those
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investments so if you want to be an
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active self-directed investor you can do
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that completely free through m1 finance
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if you're looking for TDF switch our
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target date funds those are actually
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offered through both m1 finance and
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betterment so if you're looking for a
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free option m1 Finance doesn't charge
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any type of fees for using those TD F's
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and if you're not familiar with that
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that is a target date retirement fund
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and basically it's going to reallocate
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that portfolio as you get closer to a
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retirement to make sure that you aren't
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too aggressive or conservative with that
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portfolio so TD FS are a very solid
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option for retirement investors
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especially if you're looking for a
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passive hands-off approach and then if
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you're looking for a passive or managed
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solution where you just basically don't
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have to do anything that is when I would
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recommend betterment you pay them that
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point two five percent per year they
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manage they rebalance the portfolio they
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take care of all of that you don't have
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to do just about anything with that and
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then the fourth and final step here once
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you've made your decision here on all
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these previous steps is to follow the
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rollover procedure and it's going to be
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a little bit different depending on
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which institution you are rolling over
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your 401 K from I would say that of the
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two options I mentioned betterment does
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have the best rollover process they have
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a very dedicated team to this then
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they're gonna do as much as they
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possibly can for you but in some
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instances you may have to jump on the
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phone and make a phone call or send in
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some paperwork to facilitate this
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rollover
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process but the basic steps go like this
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your 401k provider is going to sell off
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these assets and they're going to either
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mail you or your new financial
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institution what is called a rollover
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check and then that money has to be
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deposited and funded into that account
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within 60 days to meet that IRS limit so
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it's not like you have to do this
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overnight but you do have you know two
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months to work with just about so you
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definitely don't want to sleep on it you
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want to make sure it's a pretty fast
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process and then after that point you
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have rolled over your 401k into a new
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retirement account and that's basically
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the process at the end of the day so
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anyways guys that's going to wrap up
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this video that is how you roll over a
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401k I would definitely say do this
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sooner rather than later because if
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you're sitting there investing in a bad
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401k that's loaded with fees it's just
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going to be costing you money year after
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year or it's possibly just causing you
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stress having all these different
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accounts in different places and there's
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definitely a lot to be said about
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consolidating accounts and being better
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organized like I said if you do want to
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open an account with either M one
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finance or betterment I have provided
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links in the description below if you
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choose to use them and I'll also include
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some articles and videos I've done
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reviewing these two investing platforms
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just so you guys have a better
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understanding of what these platforms
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can do for you but thank you so much for
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watching this video I hope you enjoyed
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it and I will see you in the next one
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