There can be many advantages to rolling over your 401(k) into an IRA. Of course, everyone's personal financial situation is different, so we always recommend speaking with one of our dedicated advisors if you're considering an IRA. Read below to learn more and click here to schedule a call with our team.
Advantages
Control of the account: Decisions are made by you or your advisor, not your former employer.
Distributions: IRAs typically offer more flexibility for withdrawals than 401(k) accounts. It can also be easier to access these dollars.
Former employer relationship: Rolling a 401k into an IRA normally does not include ongoing communication with prior employers.
Consolidation: Rolling over to an IRA enables participants to consolidate accounts.
Wider investment selection: there are more investment options in an IRA account compared to the small fund lineup in a 401(k).
401(k) plans can have minimum amounts to keep the account open as well as change the fees and investment options once you leave the company.
Disadvantages
Delaying RMDs: Required minimum distributions are not required if you are still employed past age 72.
Access dollars earlier: Participants who separate from service with their employer may be able to begin taking penalty-free distributions at 55 vs 59 ½ with an IRA.