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Why roll over?

When you roll over a retirement plan, you generally don’t pay tax on it until you withdraw it from the new plan. By completing a trustee-to-trustee transfer to your IRA, you’re saving for your future and your money continues to grow tax-deferred. You also have ownership and control.

Here are 10 reasons to transfer an ERISA plan to your IRA…

1) Simplicity of the Required Minimum Distribution payout (not taking two RMD’s if you keep the ERISA plan)

2) There is no required 20% for federal withholding. IRA clients can choose their appropriate amount of withholding

3) Easier for an estate to deal with an IRA

  • Able to split accounts for beneficiaries
  • Anyone can be the beneficiary vs spouse for the ERISA plan
  • A trust can be named as the beneficiary

4) IRA’s work better under the SECURE Act

  • Roth conversion
  • Instant access to IRA
  • Create life insurance to replace IRA

5) More Investment Options

  • Unlimited investment options for IRA’s
  • Customized investment programs

6) Annuity Customized Options

7) Consolidate Plans to One IRA

8) Qualified Charitable Distribution (QCD) Options for IRA Holders

9) Portability Back to ERISA Plans from IRA

10) Access to Professional and Personal Advice


Other options for your 401k plan

If rolling over is not the direction you’d like to go, you have other options…

  • Keep your 401k with your former employer
  • Consolidate your 401k into your new employer’s plan
  • Cash out your 401k

Depending on your unique situation, one of these options might be a more appropriate strategy. Learn more about the advantages and disadvantages to each of these options in the article “Your Guide to 401(k) and IRA Rollovers”. Click here to read more.


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This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year on conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take and required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ed Slott is not affiliated with LPL Financial, Brass Tax Wealth Management and Storen Financial.

Copyright ©2021, Ed Slott and Company, LLC Reprinted from The Slott Report with permission. Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.



Blog by Greg Storen, MBA – Advisory Services Director, Senior Tax Accountant

Learn more about Greg and the rest of the Storen Financial team here.