If you’ve changed jobs or are retiring, rolling over your retirement assets to an IRA may be a solution. It is a non-taxable event when done properly – and gives you access to a wide range of investments and the convenience of having consolidated your savings in a single location.
In addition, flexible beneficiary designations may allow for the continued tax-deferred investing of inherited IRA assets. We can handle all details for you, including contacting your former plan administrator, opening your new rollover IRA and completing the paperwork.
In addition to rolling over your 401(k) to an IRA, there are other options. Here is a brief look at all your choices. For additional information and what is suitable for your particular situation, please consult us.
▪ Leave money in your former employer’s plan, if permitted
Pro: May like the investments offered in the plan and may not have a fee for leaving it in the plan. Not a taxable event.
▪ Roll over the assets to your new employer’s plan, if one is available and it is permitted.
Pro: Keeping it all together and larger sum of money working for you, not a taxable event
Con: Not all employer plans accept rollovers.
▪ Roll over to an IRA
Pro: Likely more investment options, not a taxable event, consolidating accounts and locations
Con: usually fee involved, potential termination fees
▪ Cash out the account
Con: A taxable event, loss of investing potential. Costly for young individuals under 59½; there is a penalty of 10% in addition to income taxes.
You should carefully consider all of your available options and the applicable fees and features of each before moving your retirement assets.