Rollover IRA

Rollovers Let You Maximize Control of Your Retirement Assets

With your lump sum distribution, you can assume control of your assets you've built up in your employer-sponsored retirement plan. You have a number of choices when it comes time to decide what to do with your assets when you decide to retire or change jobs. Your financial advisor can help you make the right choice.

Your 4 Options—and Why a Rollover Makes the Most Sense

Take the Cash	Stay in your former employer’s plan	Move to your new employer’s plan	Choose a Rollover IRA1
Advantages
Immediate liquidity	Convenience and simplicity: You can keep the same investments Preserves tax advantages and avoids penalties	Consolidation: combines your old retirement plan assets with new ones Preserves tax advantages and avoids penalties	Preserves tax advantages No penalties (assuming you choose a direct rollover) Consolidates assets Early withdrawal provisions for certain situations Potentially broader choice of investments Opportunity to take control of your financial future by working with your financial advisor
Disadvantages
Entire distribution is taxed as ordinary income; large distributions may push you into a higher tax bracket You may be liable for state or local taxes Loss of tax-deferred growth potential Less opportunity to work with your financial advisor to develop a sound investment strategy 10% penalty if you’re younger than 59 1⁄2 Puts you behind in your retirement savings	Less opportunity to work with your financial advisor to develop a sound investment strategy Inflexibility: You’re limited to your old plan’s investments No new investments: You can’t continue to contribute once you leave the company If you change jobs several times, you may end up with several small accounts at various former employers, making it hard to manage and monitor your assets You have to contact your former employer every time you have a question or problem with your retirement account	Inflexible: You’re limited to the funds offered by your new company’s plan Tenure issues: You may have to wait to join the new plan You may have fewer withdrawal options. Not all employers offer retirement plans Less opportunity to work with your financial advisor to develop a sound investment strategy	No loan provisions Transfer must be completed within 60 days
1 IRA rollover discussion assumes assets are an eligible rollover distribution and employer's new plan accepts such a rollover.