Find the opportunity with your retirement plan

Tuesday, February 27, 2024

When it comes to your retirement plan at work, we don’t usually talk about opportunity because most plans are very similar in structure. However, if you have worked for a company for several years and leave that job, you may have an opportunity to move your funds.

For example, Mercy Hospital has recently joined our community through the hospital system’s merger with Southeast Health. The organization’s employees who have participated in the retirement plan at Southeast Health may have a similar opportunity with their retirement plans soon.

That opportunity could include a few options: keeping with your former employer, rolling into your new employer, rolling into an Individual Retirement Account (IRA) or cashing out. Most individuals would agree that cashing it out doesn’t make a whole lot of sense. Keeping your funds in your now former employer could make sense if that option is allowed, but some plans do not allow this depending on your balance and provisions of the plan.

Rolling one’s retirement into your new employer’s plan could also make sense to keep your retirement dollars in one account. Rolling it to an IRA can be beneficial and offer more control, which may be good for some people and possibly bad for others.

With an employer-sponsored plan like a 401(k) or a 403(b), you typically choose how you want to allocate your money between several pre-selected investments. If you don’t like those investments, there isn’t much you can do.

In contrast, an IRA may allow you to choose from a large universe of investments—it's important to be sure to avoid penalties and taxes with this option. Working with a financial services professional can help you avoid these mistakes.

Ultimately, understanding the rules of each option, comparing performance and fees are going to help you make the best decision for your finances.

So, when opportunities with your retirement plan present themselves, it’s best to have a comprehensive retirement income plan. This will help you decide how to best manage your money and future retirement.

Advisory services offered through Alspaugh Wealth Management. Insurance services offered through Innovative Financial Consultants, an affiliated company.