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| Moving Your Savings Into Your New Employer's Retirement Plan |
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Another option is to roll over your assets from your previous plan into your new company's retirement plan. This alternative is contingent on the rules and regulations of the new plan. However, if allowed, there are a number of benefits in taking this approach.
If you roll over assets from a pension plan, your retirement assets continue to grow tax-deferred and you won't incur the 10% early withdrawal penalty. You'll also be consolidating your retirement assets, which can cut down on paperwork and help simplify your retirement investment strategy. Your new plan may also offer better investment options and provisions that weren't in your previous plan.
Even if your new plan allows rollovers, there are several issues to consider. There may be a waiting period before you can join your new company's plan or when the plan will accept rollover assets. In addition, your investment options may not be as attractive as your old plan and there could be higher fees associated with your new plan. Finally, remember that withdrawals and distributions are subject to the new plan's provisions. Rolling over assets to a new plan could also require a fair amount of paperwork. You may wish to consult with the respective human resources departments or your investment professional for assistance.
If you choose this option:
- Confirm with your new employer that their plan accepts rollovers
- To initiate a direct or indirect rollover, call your plan's toll-free number to start the distribution process
- Complete the necessary paperwork from your previous and current employer to process the transaction
- Confirm that distribution is made payable to the new employer's plan
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