By Jay Fedak, CFP®
Fedak Financial Planning- A Fee-only Fiduciary Planner

If you work in healthcare, there’s a high probability you’ve changed employers at least once. Between hospital systems, private practices, travel roles, and contract work, it’s common to accumulate multiple retirement accounts over time.

Most of those accounts sit untouched in old 401(k), 403(b), or 457 plans.

Doing nothing feels harmless, but it often comes at a real cost. In life, as in investing and saving, overcoming the inertia of doing nothing can be extremely beneficial.

If you don’t know a lot about something, or even if you think you know, it never hurts to do some research. Learning is empowering and can lead to great accomplishments down the road if we just do a little more now. Future you will be very grateful to present you.

Older employer plans typically come with limited investment options and embedded fees. You’re usually restricted to a short menu of mutual funds, many of which carry higher fees than necessary.

You don’t get to choose the best investments—you get to choose from what’s offered.

Over time, those limitations matter.

Even a 1% difference in fees alone can translate into tens—or hundreds—of thousands of dollars over a long career. Investing in a single company or sector can also be a winning strategy you don’t have in a 401(k). That’s money that could otherwise be working toward your retirement.

In a 401(k) you can choose to invest in the overall market index in a mutual fund which is typically a winning strategy in the long term but end up paying five to ten times as much in fees for the same exact investment in an exchange traded fund (ETF). This can be very costly over a long period of time.

There’s also a behavioral cost.

When accounts are scattered across multiple providers, they tend to be ignored. Allocation drifts, risk levels become inconsistent, and the overall strategy becomes unclear.

The key takeaway is simple: don’t leave old accounts behind without a clear reason.

In most cases, consolidating those accounts will lead to a cleaner, more efficient long-term plan.

There are typically three options when you leave an employer:

• Leave the account where it is
• Roll it into an Individual Retirement Account (IRA)
• Roll it into your new employer’s retirement plan (if allowed)

For most healthcare professionals, the goal should be consolidation and control.

A rollover to an IRA is often the most flexible and efficient solution—and this is where one of the biggest advantages comes into play.

With an IRA, your investment universe opens up significantly.

Instead of being limited to a pre-selected list of funds, you can choose from a much broader range of investments—low-cost index funds, ETFs, individual stocks and bonds, and even more specialized areas like fixed income strategies, real estate investment trusts (REITs), commodities, and in some cases, alternative assets such as cryptocurrency.

This flexibility allows you to lower costs by selecting more efficient investments, build a portfolio tailored specifically to your goals, diversify across asset classes beyond what most employer plans offer, and adjust your strategy over time without plan restrictions.

Just as importantly, it gives you full control over how your retirement savings are managed going forward.

Another strong option, depending on your situation:

If you change jobs, you may be able to roll your old 401(k) or 403(b) into your new employer’s plan.

Many healthcare systems allow this, and it can be a great way to keep everything in one place—especially if the new plan offers solid, low-cost investment options.

For healthcare professionals, this matters even more.

Your career often includes long hours, high stress, and limited time to focus on financial planning. At the same time, your income potential is strong, which makes optimization decisions more impactful.

Small inefficiencies today can become large missed opportunities over time.

I’ve lived this myself.

Before becoming a financial planner, I worked as a Physician Assistant across five different settings. Like many in healthcare, I accumulated multiple retirement accounts along the way.

Each time I left a position, I chose to roll those accounts into an IRA.

At first, I wasn’t sure if I was doing the right thing. That uncertainty is what pushed me to learn more—reading, studying, and eventually earning my securities license.

What I found was this:

Most people leave accounts behind simply because they don’t know what to do, or they assume it’s complicated.

In reality, the process is usually straightforward.

And in many cases, consolidating accounts—especially into a structure with broader investment flexibility—can reduce overall fees, improve investment efficiency, simplify monitoring and rebalancing, and align your portfolio with your actual retirement goals.

There are a few situations where leaving money in a prior employer plan may make sense—most notably if you plan to use the age 55 rule for early access.

But those situations are the exception, not the rule.

Bottom line: don’t leave old retirement accounts behind by default.

In most cases, taking action—whether that’s rolling into an IRA or into a new employer plan—puts you in a stronger position over time.

If you’ve changed jobs and still have retirement accounts sitting with former employers, it’s worth taking the time to evaluate your options. As always, if you have further questions or are looking to explore your situation further, please feel free to reach out to me at any time.

Jay Fedak, CFP® is a financial planner based in New Milford, Connecticut who works with individuals, families, and healthcare professionals on their financial planning needs. To schedule a complimentary phone or Zoom consultation, visit https://fedakfinancialplanning.com/ and click the Calendly link or call Jay directly at 860-750-9200.