Few things in life are scarier than getting laid off from your job or simply being fired. But should it happen, Jim Cramer says there's a silver lining.
You can roll over your 401k plan into an IRA. And that money in your 401k maintains tax-deferred status "although you were only allowed to contribute $5,500 a year to your IRA while you were allowed to contribute $17,500 a year to a 401k," Cramer said.
Although Cramer realizes there are many serious challenges involved with losing a job, he's an optimist. He believes you'll find work. But losing your job, or leaving it for a new opportunity, frees you from the shackles of the company 401k plan, which is typically limited to a handful of investment choices and often involves all kinds of charges and fees.
Conversely, an IRA allows you to actively manage a portfolio. And if Jim Cramer believes anything, it's that an individual investor who holds the stocks of good companies, and then actively manages the holdings, can beat the pros with a portfolio of 5 to 10 quality stocks.
In other words, losing your job or leaving your job, is an opportunity to put your retirement money into a fund that Cramer thinks will serve you far better in the long-run.