Leave Your Assets Where They Are

If you have at least $5,000 in your retirement plan when you change jobs or retire, you may be able to leave your assets in your old employer's plan.

If available, this is the simplest way to keep your retirement investments growing tax-deferred when you change jobs or retire. You can even leave your money invested just like it is, so you have no new decisions to make.

Limited Choices

However, before selecting this option you should consider the potential drawbacks of leaving your assets in the plan. For example, each plan makes its own rules on withdrawals and exchanges between investments, so you may face limited access to your savings.

Your investment choices will also be limited to those in the plan, so consider whether you've been happy with the investment performance and account servicing you've experienced. Also be aware that you may have to pay the plan expenses on your account.

Leaving your money right where it is may be one of the easiest choices for your retirement investments, but make sure you understand all the options before you decide which way to go. This one decision can have far-reaching effects on your financial future.

Advantages of Leaving Your Assets in Your Plan

  • Avoids current income taxes, penalties, and the mandatory 20% withholding.
  • Savings continue to grow tax deferred.
  • Retain ability to rollover your funds at a later date.

Disadvantages of Leaving Your Assets in Your Plan

  • Investment choices limited to employer's plan.
  • Plan may limit withdrawals and exchanges between investments.
  • You may have to pay plan expenses for your account.
  • Not FDIC Insured
  • No Bank Guarantee
  • May Lose Value