The Best Retirement Rollover Plan

Direct Rollover

• No matter which administrator you choose for your rollover, you should roll the funds directly from the retirement plan into the IRA. This is known as a direct rollover, and it simply means the money goes from the current administrator to the new one without passing through your hands. To start the process you need to contact the administrator you want to use for your IRA. That administrator will begin the transfer process after gathering information from you, including the account number of the retirement plan and the name and contact information of the current administrator.
  
  

Low Costs

• High investment costs can eat into your return, especially with a long-term investment such as a retirement plan. Look for an administrator that charges low expenses and fees, so you can maximize your return. Before rolling your money over, check the administrative fees charged by the plan. Some administrators charge a quarterly or yearly fee to administer IRA accounts, while others do not. Also review the expenses associated with the investment choices, and choose the lowest cost plan that meets your needs.
  
  

Flexibility

• It pays to have an administrator that can provide the type of flexibility you need in terms of investment choices. One problem with many retirement plans is that they offer only limited investment choices. By rolling the money into an IRA, you can gain access to thousands of mutual funds as well as individual stocks and fixed-income investments. Choosing a single administrator that can provide all these investment choices gives you the flexibility you may need.
  
  

Separate Account

• When you roll over your 401k, 403b or other retirement plan into an IRA, you should set up a new IRA account first, in most cases. If you have an existing IRA, you might be tempted to add the retirement plan money into that account, but there are several advantages to setting up a new account to hold that money. Setting up a new account makes it easy to track the performance of the funds going forward. You know how much you rolled over, so assessing the performance is simply a matter of checking the current balance and doing a quick calculation to determine the percentage gain. In addition, having a separate account makes tax planning easier, especially when you start taking that money out after retirement.