| I'm always being asked whether or not to move a | | | | 1. Some states do not give the same creditor |
| 401(k) or other employer-sponsored pension plans | | | | protection to IRAs that they do to 401(k)s. If this is |
| when leaving an employer. Generally the answer is | | | | important, check your state statutes. |
| "move your pension money when you leave an | | | | 2. If you have life insurance with your ex-employer |
| employer". Here are some advantages of moving a | | | | as part of the 401(k) plan, you may lose it if you |
| 401(k) rather than leaving it: | | | | transfer the money. |
| 1. You get more investment choices and opportunity | | | | 3. If you plan to retire after age 55 but before age |
| to better diversify. | | | | 59-1/2 you may have better lump-sum access to |
| 2. Expenses may be lowered. | | | | your 401(k) than to an IRA. |
| 3. You can consolidate with other money which | | | | 4. If you have a loan outstanding from your 401(k), it |
| makes administration easier. | | | | will need to be repaid prior to rolling over into an IRA. |
| 4. It is oftentimes easier to get if you need for an | | | | 5. You may have access to an investment inside your |
| emergency. | | | | ex-employer's 401(k) that will be lost if you roll over |
| 5. Can covert to a Roth IRA if you qualify and if a | | | | into an IRA, e.g., ex-employer stock that you think |
| Roth is appropriate. | | | | will continue to outperform other alternatives you |
| 6. You no longer have to worry about the financial | | | | could have. |
| stability, urge to merge or sale of your ex-company ... | | | | 6. Loss of spousal consent to change a beneficiary. |
| and this is very important if your plan contains their | | | | The roll over of your 401(k) plan at an ex-employer |
| stock. If your plan contains company stock | | | | to an IRA makes a great deal of sense in the |
| investigate the tax advantages of rolling the stock | | | | majority of cases; however, there could be |
| out of the plan, paying the taxes on your basis and | | | | circumstances that might make it better to stay put. |
| holding the stock outside the plan OR selling it | | | | Rolling over your pension money from an |
| immediately to get capital gains treatment. You'll want | | | | ex-employer should be undertaken with the advice |
| to consult with a tax professional before acting. | | | | and counsel of a financial professional that specializes |
| 7. Eliminates the chance of lump-sum distribution to | | | | in retirement planning. The process of assessing your |
| beneficiaries in case of your death. | | | | options is fairly straightforward and, if action is |
| 8. Avoids spousal consent if you want to change | | | | needed, rolling over is easy and painless. If you are |
| beneficiaries - of course this could be a disadvantage | | | | staying put because of loyalty to your lifelong |
| if you're the dependent spouse. | | | | employer, your sentiments are to be complemented; |
| 9. Better manage the tax liability of your surviving | | | | however, when it comes to your retirement savings, |
| spouse and/or heirs. | | | | your first loyalty must be to you and your family. |
| 10 Ability to convert your money into a lifetime | | | | Most retirement planning professional agree that |
| income you can't outlive. | | | | "money in employer-sponsored plans should go with |
| Here are some disadvantages of moving your 401(k) | | | | you when you the leave the company". |
| from an ex-employer: | | | | |