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Should You Roll Your Retirement Money to your New Employer?
Congratulations on your new job.
So you’ve started your new job, found out about your retirement plan options and may be interested to know if you can bring money over from your old employer’s retirement plan into this one.
Good Idea. Many people find that consolidating their retirement plans under one employer’s roof lets them consolidate accounts and makes the management of some of their retirement money easier.
Why you Might Move to Your New Employer’s Plan
- You want to consolidate your employer-sponsored plans.
- You don’t like the idea of leaving your retirement money “behind” with an organization you’re no longer affiliated with.
- Your new employer may have a plan with more attractive investment options.
Why you Might “Leave it all Behind” with your previous job
- You may not know if you’re staying with the new employer and want to leave well-enough alone for awhile.
- You may be very happy with the investment options and performance of your previous employer’s plan and think that money is doing just fine where it is.
- Your previous employer’s plan may have other more favorable features, including expenses, loan options, etc.
So, you’ve decided to move to your new employer’s plan, now what?
- Make sure the new plan is the same type as the old plan, you generally cannot mix money from one plan type into another plan type. Your new benefits manager can help you with this.
- Ask if your new employer’s plan will take contributions from other plans. (that might be important)
- Ask your new benefits manager for the necessary paperwork to move the funds and ask for assistance with the transfer (rollover)
- DO NOT TAKE A CHECK PAYABLE TO YOU FROM YOUR OLD EMPLOYER. Sorry, we didn’t mean to shout, but it’s kind of important. Any check received from your old employer must be payable to the new plan, or must be sent directly from the old plan to the new plan or you may be subject to some nasty withholding and tax penalties that can ruin anyone’s day.
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