{"id":28314,"date":"2014-06-11T09:25:16","date_gmt":"2014-06-11T13:25:16","guid":{"rendered":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2014\/06\/rolling-retirement-plan-to-an-ira.html"},"modified":"2017-11-08T11:05:33","modified_gmt":"2017-11-08T16:05:33","slug":"rolling-retirement-plan-to-an-ira","status":"publish","type":"post","link":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2014\/06\/rolling-retirement-plan-to-an-ira\/","title":{"rendered":"Business Report: Rolling Retirement Plan To An IRA"},"content":{"rendered":"
\n
\n\"steve\n<\/div>\n
Stephen Kyne, partner, Sterling Manor Financial in Saratoga Springs.\n<\/div>\n<\/div>\n

By Stephen Kyne<\/p>\n

Whenever someone leaves a job, whether voluntarily or not, one of the biggest questions they face is what to do with their 401k, 403b, or other company-sponsored retirement plan.<\/p>\n

Some people are tempted to leave the account as-is, while others are tempted to move it over to the plan at their new employer. Both are often not the best choice.<\/p>\n

As a participant in a company-sponsored retirement plan, you are just that – a participant. You are not the owner, which means that you are limited in the control you have over your hard-earned assets. Plan participants are subject to the rules of the plan, which can be very limiting. Investment choices, distribution options, cost structure, and trading limitations can all restrict the ability of your assets to meet your objectives.<\/p>\n

Consider the investment choices in your plan. Many times you will find that they are all from the same company, or a handful of companies, and you may only have one or two investment choices for each market sector. This can cause serious problems. For example, if all of your bond choices are interest-rate sensitive, how can you properly diversify in a rising-interest-rate environment?
\nCompounding the problem of limited investment choice, your plan may also have restrictions on how you allocate your funds, and how frequently you can change your allocation. If the market changes tomorrow, and you’ve hit your trading limit, what’s your plan for protecting your assets?<\/p>\n

Until recently, your employer and plan administrator did not have to disclose the full extent of the fees you were paying in your retirement plan. A rule change in 2012 meant that, for the first time, employees could see exactly how expensive their retirement plans were.<\/p>\n

Do you know how expensive your plan is, and what you’re getting for those fees?<\/p>\n

This isn’t to say that your employer-sponsored plan isn’t a good place to accumulate assets while you’re working. In fact, it is often the most convenient place to save for retirement, especially if your employer is offering a match on your contributions.<\/p>\n

It’s also likely that your plan has provisions to allow for a loan, in the event you need to borrow against your account. However, as soon as you’re eligible to roll assets out of the plan, you should seriously consider doing so.<\/p>\n

When can you move assets out of the plan?<\/p>\n

Typically when you separate from service (i.e. you retire, or are let go). Often if your plan provider changes, or if your company is acquired, you may have the option to roll your assets to the new plan, or to an IRA. You may also be eligible to distribute assets while you’re still working, if your plan allows for an in-service distribution. Eligibility for in-service distributions will be outlined in your Summary Plan Document (ask HR for your SPD).<\/p>\n

Once you’ve rolled your assets to an IRA, you’ll enjoy the benefits of being an owner, rather than just a participant. You’ll have a virtually limitless choice of investments, with far fewer restrictions, and much greater control over the cost of your investments.<\/p>\n

So, why doesn’t everyone roll their plan assets to an IRA?<\/p>\n

Most people either don’t know they can, or don’t understand how. If you’re in either of these camps, you should consult your financial advisor.<\/p>\n

The process is far simpler than you probably think, however because you may only have to go through it a few times in your life, it can seem challenging. Your financial advisor should understand the process, and likely helps clients manage rollovers on a daily basis.<\/p>\n

Please keep in mind that rolling over assets to an IRA is just one of multiple options for your retirement plan. Each of the following options has advantages and disadvantages, which should be understood and carefully considered:<\/p>\n

\u00e2\u20ac\u00a2 Understanding your options.
\n\u00e2\u20ac\u00a2 Leave assets in a previous employer’s plan, if it is allowed.
\n\u00e2\u20ac\u00a2 Roll over the assets into a traditional IRA or a Roth IRA.
\n\u00e2\u20ac\u00a2 Move the assets into a new employer’s plan, if it is allowed.
\n\u00e2\u20ac\u00a2 Cash out, or withdraw the funds.<\/p>\n

When considering rolling over assets from an employer plan to an IRA, factors that should be considered and compared between the employer plan and the IRA include fees and expenses, services offered, investment options, when penalty fee withdrawals are available, treatment of employer stock, when required minimum distribution may be required and protection of assets from creditors and legal judgments. Kyne is a partner at Sterling Manor Financial in Saratoga Springs.<\/p>\n

Photo Courtesy Sterling Manor Financial<\/p>\n","protected":false},"excerpt":{"rendered":"

Stephen Kyne, partner, Sterling Manor Financial in Saratoga Springs.By Stephen Kyne Whenever someone leaves a job, whether voluntarily or not, one of the biggest questions they face is what to do with their 401k, 403b, or other company-sponsored retirement plan….<\/p>\n","protected":false},"author":87,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[67,127],"yoast_head":"\r\nBusiness Report: Rolling Retirement Plan To An IRA - Glens Falls Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2014\/06\/rolling-retirement-plan-to-an-ira\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Business Report: Rolling Retirement Plan To An IRA - 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