Rollover Assistance

With the advent of the 401k, SIMPLE, SEP and 403b as retirement plans, many people have multiple accounts with various employers, because they have changed jobs for any number of reasons. One of the problems with this is the duplication of objectives within each account. Having a lot of funds, in several accounts, does not always provide the diversification we aim to achieve. It also makes it very difficult to keep track of your assets, when you have statements coming from multiple brokers and mutual fund companies.

The Pension Protection Act of 2006, which was signed into law on August 17, 2006 was intended to provide a legal framework for defined contribution plans that will enable plan sponsors to improve the effectiveness of their retirement plans and assist participants with increasing their retirement plan assets.

One of the highlights of the PPA is the ability of employees to have greater flexibility to rollover workplace savings plans to IRA’s. In general, the PPA allows for direct rollovers of the entire balance of workplace plans into either a Rollover IRA or a ROTH IRA. Previously only the ROTH portion of the workplace plan could be rolled over into a ROTH IRA.

Many employees find themselves or a family member in the situation of having multiple employer plans. Individuals can consolidate these assets into one diversified IRA or ROTH IRA and receive just one statement. It is very important to find someone who can analyze the assets in the accounts, make recommendations and assist with the paperwork involved in consolidating to an IRA. As long as you have terminated employment with your employer, or the particular plan has been terminated, you are eligible to roll the funds over to an IRA. Whether the Traditional IRA or the ROTH IRA best suits your needs depends on your income and tax situation. You do not have to be of retirement age to effect a rollover.

Of course, if you are of retirement age, and want to retire, you have the option to move assets out of your employer plan and into an account, which can provide a lifetime income, when you retire. The whole idea is to work with someone you trust and is available to you, when you wish to discuss your account. Every employer plan is different, and every individual is different, so personal preference is very important, and there is no “one plan fits all”.

Many employer plans are with large firms, such as Vanguard, Fidelity or Merrill Lynch. Some questions you might wish to ask yourself, when considering a change are: Is it important for me to get the same person when I call? Do I get a response, if I leave a voice mail? Can I get someone to come to my house? What are the fees involved? Am I a “Do It Youself” type person, or do I want someone to complete the paperwork and provide advice? These are some of the types of service I provide, within geographic reason. If you are considering a rollover or retirement, please feel free to contact me to discuss your options.