More and more plans are offering retirees the option of keeping their funds in their employer-sponsored 401(k) upon retirement. Since this is relatively new, we wanted to explain the shift in thought and offer a few pros and cons as you think through your options.
Pros and Cons of Not Rolling Over Your 401(k) to an IRA
Leaving your 401(k) account with your employer may help you save on fees, since they can buy funds at institutional pricing rates.
Funds in a 401(k) are protected by federal law from creditor judgments (other than IRS tax liens and spousal or child support orders), including bankruptcy.
You can’t make new contributions, nor will you be eligible for any employer contributions.
You may have fewer investment choices. A typical 401(k) plan has a few dozen funds to select from, while an IRA can provide thousands of options.
You might have a hard time managing and tracking your savings if you have multiple accounts. Consolidating your retirement accounts by rolling your 401(k)s into a single IRA can simplify your financial life.
This is a lot to consider, but we’re here to help. As soon as you know your retirement date, start asking about your options, or better yet, give us a call, and let’s review them together. As always, we’re just a phone call or email away.
The Gasaway Team
7110 Stadium Drive
Kalamazoo, MI 49009 (269) 324-0080 FAX (269) 324-3834
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