If you have changed jobs or retired, you may have retirement money lingering in one or more retirement accounts. And chances are, you have questions about what to do with those funds. You have four main options:
- Leave the funds in your former employer’s plan.
- Move the funds to a new employer’s plan.
- Roll the money to an IRA.
- Cash out the account.
Since cashing out and suffering tax consequences is never advisable (unless due to an emergency), we’ll skip #4 and instead focus on numbers 1 through 3.
Many companies let you keep your retirement savings in their plans after you leave your job. And, because it requires no action, it’s often chosen by virtue of doing nothing. At least the money remains tax deferred until withdrawn and is most likely
earning money. The trouble is, since you’re no longer working there, you’re probably less conscious of the operations of the plan and may not be giving it the best oversight.
As you move into other jobs, it can get very complicated managing savings left in multiple plans. One option is to roll that money into your new employer’s plan. That, at least, eliminates the accumulation of many plans. Another way to go is to
establish a retirement plan with a trusted partner like RCU and as you move from job to job, transfer former employers’ savings plans into the retirement plan controlled by you.
Sending your retirement funds into a traditional or Roth IRA makes it easier to monitor your investments and simplify account information at tax time. And IRAs typically have a broader range of investment options than employer plans. At RCU, you can work
with a financial advisor who will help you identify and implement strategies to attain your financial goals.
Adding a traditional or Roth IRA (we can help you decide which) helps round out a full picture of your financial goals and needs. We can meet to look at your complete portfolio, including money you may have invested with an employer or elsewhere. Together,
we can talk about creating a plan for your financially solid future.
Call us at (707) 576-5040 to schedule an appointment with one of our Financial Advisors.
Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The credit union has contracted with CFS to make non-deposit investment products and services available to credit union members. Before deciding whether to retain assets in an employer sponsored plan or roll over to an IRA an investor should consider various factors including, but not limited to: investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock.