{"id":15194,"date":"2014-06-04T08:46:52","date_gmt":"2014-06-04T12:46:52","guid":{"rendered":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2014\/06\/business-report-rolling-retirement-plan-to-an-ira.html"},"modified":"2014-06-04T08:46:52","modified_gmt":"2014-06-04T12:46:52","slug":"business-report-rolling-retirement-plan-to-an-ira","status":"publish","type":"post","link":"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2014\/06\/business-report-rolling-retirement-plan-to-an-ira\/","title":{"rendered":"Rolling Retirement Plan To An IRA"},"content":{"rendered":"
\n
\"steve\n<\/div>\n
Stephen Kyne, partner, Sterling Manor Financial in Saratoga Springs.\n<\/div>\n<\/div>\n

By Stephen Kyne<\/p>\n

Whenever someone leaves a job, whether voluntarily or not, one of the biggest questions they face is what to do with their 401k, 403b, or other company-sponsored retirement plan.<\/p>\n

Some people are tempted to leave the account as-is, while others are tempted to move it over to the plan at their new employer. Both are often not the best choice.<\/p>\n

As a participant in a company-sponsored retirement plan, you are just that – a participant. You are not the owner, which means that you are limited in the control you have over your hard-earned assets. Plan participants are subject to the rules of the plan, which can be very limiting. Investment choices, distribution options, cost structure, and trading limitations can all restrict the ability of your assets to meet your objectives.
\nConsider the investment choices in your plan. Many times you will find that they are all from the same company, or a handful of companies, and you may only have one or two investment choices for each market sector.<\/p>\n

This can cause serious problems. For example, if all of your bond
\nchoices are interest-rate sensitive, how can you properly diversify in a
\nrising-interest-rate environment?<\/p>\n

Compounding the problem of limited investment choice, your plan may also
\nhave restrictions on how you allocate your funds, and how frequently
\nyou can change your allocation. If the market changes tomorrow, and
\nyou’ve hit your trading limit, what’s your plan for protecting your
\nassets?<\/p>\n

Until recently, your employer and plan administrator did not have to
\ndisclose the full extent of the fees you were paying in your retirement
\nplan. A rule change in 2012 meant that, for the first time, employees
\ncould see exactly how expensive their retirement plans were.<\/p>\n

Do you know how expensive your plan is, and what you’re getting for
\nthose fees?
\nThis isn’t to say that your employer-sponsored plan isn’t a good place
\nto accumulate assets while you’re working. In fact, it is often the most
\nconvenient place to save for retirement, especially if your employer is
\noffering a match on your contributions.<\/p>\n

It’s also likely that your plan has provisions to allow for a loan, in
\nthe event you need to borrow against your account. However, as soon as
\nyou’re eligible to roll assets out of the plan, you should seriously
\nconsider doing so.<\/p>\n

When can you move assets out of the plan?<\/p>\n

Typically when you separate from service (i.e. you retire, or are let
\ngo). Often if your plan provider changes, or if your company is
\nacquired, you may have the option to roll your assets to the new plan,
\nor to an IRA. You may also be eligible to distribute assets while you’re
\nstill working, if your plan allows for an in-service distribution.
\nEligibility for in-service distributions will be outlined in your
\nSummary Plan Document (ask HR for your SPD).<\/p>\n

Once you’ve rolled your assets to an IRA, you’ll enjoy the benefits of
\nbeing an owner, rather than just a participant. You’ll have a virtually
\nlimitless choice of investments, with far fewer restrictions, and much
\ngreater control over the cost of your investments.<\/p>\n

So, why doesn’t everyone roll their plan assets to an IRA? Most people
\neither don’t know they can, or don’t understand how. If you’re in either
\nof these camps, you should consult your financial advisor.<\/p>\n

The process is far simpler than you probably think, however because you
\nmay only have to go through it a few times in your life, it can seem
\nchallenging. Your financial advisor should understand the process, and
\nlikely helps clients manage rollovers on a daily basis.<\/p>\n

Please keep in mind that rolling over assets to an IRA is just one of
\nmultiple options for your retirement plan. Each of the following options
\nhas advantages and disadvantages, which should be understood and
\ncarefully considered:<\/p>\n

\u00e2\u20ac\u00a2 Understanding your options.
\n\u00e2\u20ac\u00a2 Leave assets in a previous employer’s plan, if it is allowed.
\n\u00e2\u20ac\u00a2 Roll over the assets into a traditional IRA or a Roth IRA.
\n\u00e2\u20ac\u00a2 Move the assets into a new employer’s plan, if it is allowed.
\n\u00e2\u20ac\u00a2 Cash out, or withdraw the funds.<\/p>\n

When considering rolling over assets from an employer plan to an IRA,
\nfactors that should be considered and compared between the employer plan
\nand the IRA include fees and expenses, services offered, investment
\noptions, when penalty fee withdrawals are available, treatment of
\nemployer stock, when required minimum distribution may be required and
\nprotection of assets from creditors and legal judgments.
\nKyne is a partner at Sterling Manor Financial in Saratoga Springs.<\/p>\n

Photo Courtesy Sterling Manor Financial<\/p>\n","protected":false},"excerpt":{"rendered":"

Stephen Kyne, partner, Sterling Manor Financial in Saratoga Springs.By Stephen Kyne Whenever someone leaves a job, whether voluntarily or not, one of the biggest questions they face is what to do with their 401k, 403b, or other company-sponsored retirement plan….<\/p>\n","protected":false},"author":121,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,22],"tags":[58,70],"class_list":["post-15194","post","type-post","status-publish","format-standard","hentry","category-business-reports","category-financial-planning-investments","tag-business-reports","tag-financial"],"yoast_head":"\r\nRolling Retirement Plan To An IRA - Saratoga Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.saratoga.com\/saratogabusinessjournal\/2014\/06\/business-report-rolling-retirement-plan-to-an-ira\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Rolling Retirement Plan To An IRA - 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