![#110 - Pros and cons of rolling over employer plans [like a 401(k)] to an IRA](https://is1-ssl.mzstatic.com/image/thumb/Podcasts211/v4/0f/71/81/0f718116-51de-e6d1-60fd-370eaffe25e3/mza_2066249758535158314.jpg/400x400bb.jpg "#110 - Pros and cons of rolling over employer plans [like a 401(k)] to an IRA")
#110 - Pros and cons of rolling over employer plans [like a 401(k)] to an IRA
Update: 2024-08-01
Description
Andy summarizes the pros and cons of rolling over an employer plan (such as a 401(k), 403(b), 401(a), 457 or the federal Thrift Savings Plan) to an IRA or Roth IRA. To sum up:
Potential PROS of rolling over an employer plan to an IRA or Roth IRA:
- More investment options
- Likely lower fees and costs
- Access to professional advice
- Better control over tax withholdings
- More withdrawal options
- Less Required Minimum Distributions ("RMDs") to manage
- Less financial clutter
Potential CONS of rolling over an employer plan to an IRA or Roth IRA:
- May lose the ability to take early distributions without penalty
- May lose the ability to cleanly do backdoor Roth IRA contributions
- May lose the ability to continue to delay RMDs from that plan (if you're still working at that employer)
- Lose the ability to take loans from the money
- May lose the ability to take advantage of Net Unrealized Appreciation ("NUA") of company stock
- May lose access to a stable value or managed income portfolio investment option
- Potentially less creditor protection
Links in this episode:
- Summary of the creditor protection of IRAs and Roth IRAs by state - here
- Tenon Financial monthly e-newsletter - Retirement Planning Insights
- Facebook group - Retirement Planning Education (formerly Taxes in Retirement)
- YouTube channel - Retirement Planning Education (formerly Retirement Planning Demystified)
- Retirement Planning Education website - www.RetirementPlanningEducation.com
To send Andy questions to be addressed on future Q&A episodes, email andy@andypanko.com
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