Phil's Personal Finance Tip of the Day:
Best retirement move almost nobody makes
Experts say more savers should roll plans into their new job’s 401(k)By Ian Salisbury/MarketWatch
When it comes to rolling over retirement accounts, a new
government report suggests that job switchers are ignoring what may be their
best option: Pouring savings into a new employer’s 401(k).
For many investors, the term “rollover” is synonymous with moving money from an employer-sponsored plan like a 401(k) into an individual retirement account. But it is also an option to move those assets sitting in an old 401(k)—or other defined-contribution plan like a 403(b)—into a similar plan at the new job.
New research from Congress’s investigative arm, the Government Accountability Office, suggests that paperwork hassles and a hard sell from IRA providers mean investors too frequently overlook the latter option. “It’s unnecessarily hard to do the right thing,” says Alison Borland, a retirement strategist at benefits company Aon Hewitt, which estimates that investors roll $9 into IRAs for every $1 that goes into a new 401(k).
Investing pros agree that cashing out retirement savings is almost never wise. But there are benefits to both of the other alternatives: IRAs typically offer a wider range of investment options, while 401(k) plans offer lower costs, particularly if they are sponsored by a big employer.
To read the entire article from Ian Salisbury/MarketWatch:
http://www.marketwatch.com/story/best-retirement-move-almost-nobody-makes-2013-04-15?siteid=yhoof2
You will never do anything in this world without courage. It is the greatest quality of the mind next to honor. -Aristotle
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