Leave it in an old employer plan or roll it into my IRA?

From time to time I get questions from my clients wondering what they should do with an old 401k and 403b plan. The question is would they be better off leaving it where it is, rolling it in to a plan with their new employer or rolling in to their own personal IRA.

While there are a lot of considerations for this, including the fees of the plan involved, the investment choices available, and any types of withdrawal restrictions, the IRS also has a set of rules that govern various types of distributions from these plans.

I have enclosed a chart* that lists just about every type of distribution and reasons for taking one that you could do from a retirement plan and how it affects both employer sponsored plans such as 401k’s and 403b’s, and then individual plans such as IRA’s, Simple IRA’s, and SAR-SEP’s. The appropriate internal revenue code is listed after each type of contribution in case you wanted to check in to this further.

As usual, I am willing and able to discuss with you this type of information in case you have money with an old employer or may be retiring and are wondering whether to leave your money with the employer or roll it over to your own personal IRA. Please email us or call us to discuss this further.

Best regards,

Marc

Marc R. Gillespie, CLU, ChFC, CFS, MSM, CRPC, CRPS, CLF

*Ed Slott’s October 2011 Newsletter