Reader reacts: Investors must know 401(k) rollover options

Regarding the article "Navigating 401(k) rollovers" (InvestmentNews, March 3), though I agree that there can be conflicts of interest between plan advisers and their 401(k) participants regarding rollovers to individual retirement accounts, and that the costs of commissions and fees borne by investors should absolutely be disclosed, among other potential negative consequences, it is imperative that older, tenured 401(k) plan participants know their options about an in-service withdrawal/rollover during a very critical time. With retirement looming on the horizon just one to five years out for many, and with an elevated, Federal Reserve-stimulus-induced inflated stock market, those who don't look at all their options potentially could do so at their own peril if another 2001- or 2008-type decline materializes and 401(k)s become 201(k)s again. Financial planning is about just that — planning. There are other options to help or attempt to reduce portfolio risk through an IRA, as the investment choices can be virtually unlimited — even options to provide guaranteed income streams throughout retirement that these participants must review. Unfortunately, most of these folks don't think about doing any planning with respect to their 401(k)s until after they retire, which is a huge mistake. Although regulators clearly care about investors and have been correct in recently warning 401(k) investors about some of the negatives related to the potential costs of rolling these assets into an IRA, it is just one consideration that an investor must weigh among many, especially those who are older and nearing retirement. If another 2001 or 2008 recurred and all these people who were eligible to use an in-service withdrawal/rollover simply chose not to consider it because of the "costs," would the regulators start cutting checks to all those who lost money and had to delay their retirement by five to 10 years because their 401(k) values plummeted? Of course not. No strategy guarantees a successful outcome, but education and awareness of all the options available to an investor and their pros and cons is what this is all about. Chris Cosenza President Brookhaven Wealth Management Inc. Atlanta