Protect What You’ve Built, Reposition It Intentionally.
When someone changes employers or retires, the first decision that must be made is what to do with the retirement account. Leaving it behind means giving up control. Rolling over and transferring the previous employer’s retirement account puts control back in the hands of the individual.
The Core Reason: Control
Employer retirement plans are designed for current employees, not past or retired employees. After leaving a job:
- The plan no longer works for the exiting employee
- Investment options are limited and are exposed to market losses.
- Capital preservation is not the priority
- Long-term tax exposure is ignored
A rollover or transfer allows for:
- Controlled risk and manage/limit market losses
- Control over and understanding of when income should be taken
- Controlling and moving with future tax legislation.
- Control over beneficiary and succession planning
Once a job has been left, there is no reason to stay loyal to the previous employer and their retirement plan.
pitfalls of doing nothing
Delaying a rollover/transfer can lead to:
- Market exposure/investment losses that can and will delay retirement
- Lost time for reduction of future income taxes.
- Previous employer may decide to change third party administrators that further limit options
- Missed opportunity to secure a 20% or higher cash deposit on eligible rollover transfers.
when to act
Symptoms that indicate its time to rollover or transfer retirement accounts:
– Retirement is within the next twelve months
– There has been a recent change of employment
– Employer layoff
– Having multiple old retirement accounts
– Currently over 55
– Needing income over market performance
– A guarantee of no market loss
Video: Rollovers and the Power of Zero
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