Should You Roll Over Your Retirement Plan When You Retire?
Here are some pros and cons of leaving your money in the company retirement plan when you retire vs. rolling it over to an IRA.


When a person retires with a company retirement plan, it’s important to know the pros and cons of rolling over to an IRA vs. leaving your money in the plan. And you won’t come up with the same answer for everyone.
For example, if you retire between the ages of 55 and 59½, and you need to take money out of your retirement plan to pay off your mortgage, in most cases it would be far better to leave your money in the company plan, at least until you take this withdrawal. This is because you can pull the money out without a 10% penalty, unlike with an IRA.
Or, if you plan on getting new employment, you may want to leave the money in the company plan so you can roll it over to the new employer’s plan. In most cases, this would allow you to delay taking required minimum distributions (RMDs) at age 73 because you’re still working.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Also, if you have access to good investment advice through your company plan or make your own investment decisions, generally the fees on the investments are going to be lower than buying the same type of investments in an IRA through a financial adviser.
When leaving your money in the company plan makes sense
Company plan assets also receive federal creditor protection, whereas state law protects IRAs, with some states offering little or no creditor protection against things like lawsuits, divorce and other creditor problems. If your state is weak on creditor protection and you have legal or creditor problems, you may be better off leaving your money in the company plan.
On the other hand, doing a rollover to an IRA would allow you to have a much broader choice of investment options to choose from rather than being stuck with a limited number of investments offered by a typical company plan.
And in most cases, former employees generally receive far better service and more professional advice from financial advisers compared to some inexperienced phone representative where the company plan has been outsourced to a third party.
For the charity-minded, a qualified charitable distribution (QCD) is a way to take part of your RMD tax-free if you’re giving the funds to charity.
Remember, if you don’t itemize, your charitable giving is no longer deductible, but the QCD creates the same end result even if you don’t itemize. This powerful tax advantage can be made only from an IRA, so it’s lost if the funds remain in your company plan.
IRAs handy for combining different retirement accounts
The IRA is also a handy place to consolidate and simplify all the different retirement accounts into one IRA or perhaps one IRA and one Roth IRA.
This is a huge advantage in a situation where you’re having to keep track of several retirement plans, along with the beneficiary withdrawal options on each plan, the statements for each plan, the passwords for each plan and so on.
Lastly, with company plans, in most cases, employees have to take their RMD from each plan separately, whereas IRAs can be consolidated for calculating RMDs, which can really help simplify the process. For example, IRA owners can take their RMD for all of their IRAs from just one of several IRAs.
So if you’re in the valley of decision on whether or not to roll your company plan over to an IRA, start by reviewing this list of pros and cons, and then perhaps talk with a professional financial adviser, who can help you to make a decision based on what works best for you.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

-
These Stocks Dipped in 2025. Do They Have Value?
If you are looking to add new long-term positions to your portfolio, as you should, this is the time to examine stocks that the market shuns.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy Investing
Investing in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy Investing
Investing in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's Executives
Feeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
-
I'm a Financial Planner: Here's How to Invest Like the Wealthy, Even if You Don't Have Millions
Private market investments, once exclusive to the ultra-wealthy and institutions, have become more accessible to individual investors, thanks to regulatory changes and new investment structures.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It Helps
Saving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
-
I'm a Financial Planner: How to Dodge a Retirement Danger You May Not Have Heard About
Timing is everything, and sequence of returns risk can mean the difference between a retirement nest egg that's overflowing … or empty.
-
Caring for Aging Parents: An Expert Guide to Easing the Financial and Emotional Strain
Early conversations, financial planning and understanding the progression of care needs can help to mitigate stress and protect family relationships.
-
I'm a Financial Adviser: The OBBB Is a Reminder for Older People to Have a Long-Term Plan
The new tax bill presents a good opportunity for retirees to revisit tax plans, look into doing some Roth conversions and consider plans for long-term care.
-
I'm an Insurance Expert: This Is Exactly Why Your Insurance Rates Are Soaring (and What You Can Do)
A dramatic rise in the frequency and cost of severe weather and wildfires means you need to prepare, prepare, prepare — no matter where you live — for higher premiums.