Is a rollover right for you?

Alliant financial consultants

Have you recently changed jobs? Or have you changed jobs a few times over the years? Then you may be juggling multiple retirement plan accounts. Sure, it’s acceptable to leave your money in your former employer’s plan, as long as your balance is over $5,000 and your old employer can’t cash you out. But, in many instances it may benefit you more to consolidate your assets.

Consolidation can make it much simpler to administer and allocate your assets.1 When your entire retirement portfolio is summarized on one statement, it’s easier to track performance and make changes. But before you initiate a rollover, compare the investment options and their associated fees in your old plan versus those in your new plan.

  • Could you properly diversify your assets in your old plan?1 If your invest¬ment choices were limited, consider moving your old account into your new account.
     
  • Are the investment fees higher or lower in your current plan? If you pay more with the old plan, consider moving your assets to a plan with lower investment fees.
     
  • Are you satisfied with the investment choices and fees charged in your current plan? If you’re unsatisfied with your current plan and not thrilled about your old plan, consider the option to roll over your old plan assets into an IRA.
     

Initiating a rollover isn’t rocket science. First, check your current plan rules to confirm that rollovers are permissible – most plans accommodate this feature. Then, contact the administrator of your old plan (this information is on your quarterly statement). Some plan providers have a simple online request process, while others require you to complete a paper-based rollover form. Your current plan or IRA provider may even furnish a rollover service for you.

On another note: it’s important to know the difference between a rollover and a distribution. A rollover allows you to transfer your money from one qualified retirement account to another without incurring tax consequences. “Qualified” accounts include your new employer’s plan or a rollover IRA.

 

1. Asset allocation and diversification do not ensure a profit or protect against a loss in a declining market.


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