Common wisdom holds that when you leave a company, you should take your retirement account with you.
But common wisdom is sometimes wrong.
Just as group medical insurance is generally a better bargain than individual coverage, a group retirement plan can offer advantages investors can’t get if they roll the money into an IRA, says Wayne Bogosian, president of the PFE Group and co-author of “The Complete Idiot’s Guide to 401(k) Plans.”
The best retirement plan for you may be different than that for another. Before you move your account, look at the deal from all the angles.
CPA Ed Slott believes that IRAs offer “more choice, more control” for consumers than company-sponsored 401(k) plans. “In most cases, a rollover is better,” says Slott, author of “The Retirement Savings Time Bomb … and How to Defuse It.” But, he admits, there are some issues — like holding company stock, early retirement or threats of law suits — that can be game changers.
So as you pack up your Rolodex, your Koosh ball and that silver picture frame, consider leaving your 401(k) account right where it is. Here are six reasons that may make sense.