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Move Your Investments to Your New Employer's Plan
If your new employer offers a qualified retirement plan, you may be able
to move your assets into it. This option offers you the benefit of consolidating
your retirement assets in one place. To avoid the 20% mandatory tax withholding,
have your distribution rolled directly into the new plan. Make sure your
new plan will accept the transfer before asking for the distribution from
your old plan.
Before you choose this option, it's also a good idea to explore
the investment choices and any restrictions under the new plan. You may
find that a Rollover IRA provides you with greater flexibility. Keep in
mind that if you choose a rollover IRA, you'll still have the option of
moving your investments into your new employer's qualified retirement plan
at a later date – as long as you keep these assets in a separate
account from your other retirement savings.
Advantages of Transferring to Your
New Employer's Plan
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Avoids current income taxes, penalties, and the 20% mandatory
withholding.
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Investments continue to grow tax deferred.
- Your retirement assets are in one place and are easier to
track.
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If the new plan has a loan feature, you may be able to borrow
your assets.
Disadvantages of Transferring to Your
New Employer's Plan
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Investment choices are limited to the plan selections.
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Plan may limit withdrawals and exchanges between investments.
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Next Steps
Ready to roll over funds now?
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