What IRA Should I Roll My 401k Into?

Your employer-sponsored retirement plan offers tax deferral and will enable savings to compound faster. By rolling over funds into an IRA, tax savings will continue and savings will grow more quickly.

An Individual Retirement Account, or IRA, provides more investment choices than your 401(k). Consider opening one at Betterment – one of the world’s leading robo-advisors – so diversified portfolios can be built specifically for you.

Taxes

When rolling an IRA, it’s essential to pay close attention to any taxes that may be due. Your chosen financial institution can assist in calculating this figure for you. In addition, make sure you look into their offerings for investments and online tools as this could also play a part in making this decision.

IRAs often provide more investment options than employer-sponsored plans, and you may be able to lower fees by switching to a low-cost provider. But it’s important to keep in mind that fees for an IRA could be more costly than those charged under your old 401(k).

Arielle O’Shea is a retirement and investing expert who has been featured on national media outlets like the “Today” show, NBC Nightly News and others. Her sources for research include primary studies such as peer-reviewed studies, government websites, academic research papers and interviews with industry experts. Arielle works for NerdWallet – an independent consumer finance company where all content is fact-checked to ensure accuracy, timeliness and relevance – where her expertise can be found in all of its forms.

Fees

When making the move from an employer-sponsored retirement plan to an IRA, be aware of all fees involved with each account. While IRAs generally charge lower investment management fees than their predecessors, other expenses should also be considered when choosing to roll it over.

Employer-sponsored plan participants tend to enjoy economies of scale that reduce costs through “institutional pricing.” Furthermore, an IRA won’t provide as much creditor protection.

IRAs can also be subject to state and federal income taxes as well as transaction fees or charges from certain brokers, but using one with lower fees could reduce expenses significantly. At Ameriprise Financial Advisors can assist in evaluating any additional rollover expenses you might incur and whether it would outweigh its advantages, in addition to helping find the perfect IRA solution for you.

Investment options

IRAs typically provide more investment options and lower management fees than 401(k) plans, while making it easier to track and manage all your retirement assets in one account. You may not be eligible to take penalty-free withdrawals until age 59 1/2.

When selecting an IRA provider, prioritize those that offer low or no account fees and offer a selection of low-cost investments. Consider opening your IRA with a robo-advisor instead; these computer algorithms automatically select and rebalance investments according to your goals and risk tolerance – plus can even help steer clear of more costly mutual funds! Plus IRAs offer stronger legal protections than their 401(k) counterparts!

Choices

Millions of people move money out of workplace retirement plans into individual retirement accounts (IRAs) each year, often the single biggest transaction many savers make over time. Selecting the ideal provider for an IRA is key in keeping fees low while accessing various investments and resources to effectively manage savings accounts.

When investing, direct rollover is often the preferred approach, where your old employer’s plan sends funds directly to your new IRA custodian without tax withholding or withholdings being applied on distributions – helping keep taxes at a minimum and reduce overall tax withholding requirements.

If you are contemplating a 401k rollover, carefully evaluate all available options and consult with a Voya financial professional about all types of IRAs available to you. Your advisor at Voya can assist in comparing benefits and costs across providers until finding one that suits your specific needs.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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