Don't Set It and Forget It!
It happens. You accept the job offer, and your attention turns to the expectation and potential of a new opportunity. Once the job begins, you set up your direct deposit, fill out your W-4, and sign up for benefits. Checklist complete. With all the excitement and anticipation of what’s to come, you may have forgotten about the retirement plan you left behind at your old job. You wouldn’t be the only one. Based on a study done by financial services firm, Capitalize, roughly 25% of all 401(k) assets in the US are in either forgotten or left-behind 401(k) accounts. One way to better manage that retirement plan is to roll the proceeds into a Rollover Individual Retirement Account (IRA). While there may be reasons to leave your assets in a former employer’s plan, there are plenty of benefits for rolling those assets into an IRA.
Simplicity and Consolidation:
Rolling over an old retirement plan can make a difference when it comes to the simplicity of tracking fewer accounts and corresponding statements, consolidating all accounts at one custodian, and maintaining a more succinct investment strategy across your various accounts. As you approach age 73 and need to take a required minimum distribution, consolidation will allow you to draw from one IRA, as opposed to taking multiple distributions.
Investment Selection and Managed Advice:
One of the great downfalls in the retirement planning industry is the lack of advice that surrounds most corporate retirement plans. For many, this represents the largest savings vehicle for retirement, yet many never receive any counsel on investment selection along the way. Neglecting a proper investment strategy can really be a downfall, especially over a longer time horizon. When investing through an IRA, the range of investment options will often be far greater than those in a traditional retirement plan, as you will have access to individual stocks and bonds, as well as ETFs and funds, and you have the option to work directly with an investment professional.
Broad Range of Account Types:
Rollovers are not just limited to a 401(k) plan. You can also rollover a 403(b) plan, 457(b) plan, some pensions, and certain annuities, among others.
A rollover can be a great solution for simplifying and consolidating your account management, while providing a wider and more personalized range of investment options. If you’ve left a job or have an unmanaged retirement account, let us assist you to see what the best course of action for you might be going forward.
Source: Capitalize. “The True Cost of Forgotten 401(k) Accounts (2023).” Capitalize, 14 Jun. 2023, www.hicapitalize.com/resources/the-true-cost-of-forgotten-401ks/
DISCLOSURE: The information provided is for informational purposes only and should not be construed as investment advice or a determination that a particular product or service is suitable for any individual. This information should not be relied upon in making an investment decision. The information should not be regarded as an offer to sell or a solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be in violation of any local laws. The information presented does not purport to be a complete description of Delta Asset Management, LLC or its investment services. Registration does not imply a level of skill or training. Past performance may not be indicative of future results.