If you have savings in an employer-sponsored retirement plan like a 401(k), you have options when you leave your job such as leaving the assets in the employer's plan, rolling them over to an IRA or another employer's plan. There are various factors to consider in making this decision including who controls the assets, available investment options, fees, required minimum distributions, and beneficiary options. An Ameriprise financial advisor can help you evaluate these options and decide what is best for your individual situation based on your retirement goals.
1. If you have savings in your employer’s 401(k) plan, 403(b) plan or other employer-sponsored retirement plan, you
may have several options when you become eligible for a distribution (withdrawal), including leaving the assets in
your employer’s plan, rolling to another employer’s retirement plan or rolling them into an Ameriprise®IRA. To help
you decide, we’ve identified several issues to discuss with your Ameriprise financial advisor as well as your tax
and legal advisors.
Leave it or roll it?
®
Evaluating options for your retirement plan assets
Employer’s plan Ameriprise IRA
Ownership
control
• A qualified plan trustee owns the assets, and plan participants
are bound by the plan’s constraints.
• Assets may be subject to blackout periods in which account
access is limited.
• You are the owner and have full access rights.
• Assets are not subject to blackout periods.
Investment
options
• Plan sponsor selects the investment options.
• May be employer-directed and/or self-directed.
• Access to annuities or other investments with guaranteed
retirement income options may be limited.
• A wide variety of investment options.
• Self-directed accounts.
• Access to a wide range of investments with guaranteed
retirement income options.1
Investment
services
• Plan may offer computer-generated advice, managed
portfolios or a target-date option to help you select between
investment options.
• Investment professionals, including your financial advisor,
are generally limited to providing you investment education.
• You can choose the level of advice and service you
desire by opening a brokerage or managed account.
• Your financial advisor will generally be able to provide
you with broader services and is able to integrate your
IRA with a financial plan to help you identify and track
progress against your goals for retirement.
Fees • Your investment expenses may be relatively low due to
institutional pricing.
• Typically, you will not pay fees for trading within your account,
mutual fund loads or commissions.
• An employer may charge reasonable fees to former workers
and their beneficiaries who remain in the plan, even if the
employer pays the fees for active workers.
• Your investment expenses, and the compensation
Ameriprise and your financial advisor receive, will vary
depending on the products and services you purchase
within your IRA.
• Depending on the type of account you open, you may
be charged a transaction fee when trading within your
account.
• An annual IRA custodial fee may apply but will be waived
if you qualify for Ameriprise Achiever Circle Elite status.2
Distribution
flexibility
• Some plans may limit distributions to a single lump sum or put a
limit on the number of distributions that can be taken in a year.
• You can decide the timing and frequency of the
distributions you will need to meet your retirement
income goals.
Beneficiary
planning
and options
• Some plans may limit your ability to name multiple or
contingent beneficiaries.
• Your spouse beneficiary can roll over plan assets to his or
her own IRA, inherited IRA or an employer’s plan.
• Your non-spouse beneficiary can roll over inherited plan
assets to an inherited IRA. This rollover generally must take
place by Dec. 31 of the year following your death in order for
IRA distribution rules to apply. Usually, your non-spouse
beneficiary may not leave money in the original plan and take
lifetime distributions.
• Check plan provisions for your available options.
• IRAs offer flexible beneficiary options, including multiple
and contingent beneficiary designations and certain
custom beneficiary designations.
• Your spouse beneficiary can roll over assets to his or her
own IRA, an inherited IRA or an employer’s plan.
• Your non-spouse beneficiary can move assets to an
inherited IRA and stretch out distributions throughout
his or her life expectancy.
• You may choose to restrict beneficiary access to the
IRA assets.