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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
Pros:
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.
Cons:
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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