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If you have left retirement investments behind in a previous employer's plan or accumulated multiple IRAs, you know that it can be frustrating to stay on top of many different accounts. A rollover IRA allows you to move retirement plan assets from an employer-sponsored plan or existing IRA into an IRA account.
By consolidating your retirement investments into a single, rollover IRA, your money has the potential to work harder for you — and managing your investments can be easier and more convenient. The benefits of consolidation may be even more valuable after you retire and when you are required to take distributions from your account.
Here are ten reasons to consolidate your retirement assets in a rollover IRA.
When all your investments appear on one statement, it may be easier to determine whether your investment choices still meet your needs.
If you own funds with overlapping investment goals-or you've overlooked a segment of the market-it may be easier to spot these weaknesses when all your retirement assets are consolidated in one account.
With only one account, there is only one relationship to manage, only one company to deal with when you have questions or concerns.
When your retirement assets are in one account, it's easier to notice when your asset allocation strays from its targets-and simpler to bring them back into balance.
You may be paying more than you think to maintain multiple IRAs and 401(k)s. Review your account costs-fees can really add up over time. Compare the cost of maintaining your current accounts to the cost of a single Rollover IRA.
When you are 70 1? 2, you'll be required to withdraw a minimum amount each year from your IRAs. That calculation can be complicated when you have multiple accounts scattered at different institutions. With one IRA, the calculation is easier-and withdrawals are simpler.
There are no tax penalties associated with consolidation when the money in your tax-advantaged accounts is moved directly to your rollover IRA.1
When your retirement investments are consolidated in one IRA, you're in more control. There are no limitations on exchanges or transactions. When your money stays in a former employer's plan, plan rules may impose limits on account transactions and access.
Estate planning may be easier because a rollover IRA may offer your beneficiaries more flexible distribution options than a 401(k), which may result in a more favorable tax situation.
Replacing multiple accounts with a single account can reduce the number of statements you receive, cut back on forms at tax time- relief for your mail box and for the environment.
A rollover IRA is an IRA designed to let you move assets from another tax-advantaged retirement account, such as a 401(k), 403(b), 457 or Traditional IRA.
Typically, there is no additional cost to move your assets to a rollover IRA and there are no tax penalties.
To find out more about the benefits of consolidation through a rollover IRA, call a financial advisor at AARP Financial today at 1-866-218-6142. Our financial advisors are salaried, non-commissioned professionals who are dedicated to helping you make the right choices for your personal financial situation.
Thinking about consolidating? Take a few minutes to complete a worksheet like the one below. Then give us a call at AARP Financial 1-866-218-6142.
Step One |
Gather current account statements and the company contact information for assets left in a previous employer's plan. |
Step Two |
Gather statements and company contact information for each Traditional or Roth IRA. |
Step Three |
Give us a call! |
When you call AARP Financial, an experienced professional will answer your questions and help you execute a rollover IRA. We'll guide you through the entire process from start to finish.
| Previous Employer | Company Contact Information | Type of Plan | Current Account Balance |
|---|---|---|---|
| XYZ Company | Janet Smith, 978-555-1212 |
401(k) | $6,200 |
| IRA Custodian | Company Contact Information | Traditional or Roth IRA | Current Account Balance |
| Good Great Bank | Mr. Jones, 978-555-1212 |
Traditional IRA | $15,000 |
1 Please note if you have an outstanding loan on your employer-sponsored retirement plan, check with your employer as there may be adverse tax consequences if the loan is not repaid before rolling over. For decisions relating to consolidation and rollovers, consult with your tax advisor regarding your particular situation. While AARP endorses the services provided by AARP Financial Inc., AARP does not offer financial products or services itself and cannot recommend that you or any specific individual should purchase any particular product or service. AARP Financial Inc. is a registered investment adviser and a subsidiary of AARP. AARP Financial Inc. does not provide tax advice. Please consult a tax advisor for information pertaining to your particular situation.
