IRA and retirement accounts
I am just starting my first professional job out of college and am new to the retirement fund discussion. I have retirement funds from my previous job that automatically transferred into an IRA savings account. I have been advised to just transfer those funds to the program at my new job; however, I don’t want to pay another transfer fee. I also don’t want it just sitting in a savings account either. Another factor is that I only plan on staying with this company for up to 5 years and will again need to transfer funds. Is the best decision at this point to transfer my current funds in the IRA savings account to my new company or to transfer them into an IRA Roth type account? I want to be smart and informed about it, but not sure where to start. Any help is much appreciated. Thanks
Permalink Submitted by Alan - IRA critic on Wed, 2016-06-15 21:02
You should have been notified by the prior employer plan that your balance would be rolled to the IRA if you did not respond by a deadline providing other instructions such as your preferred IRA custodian. Were you not notified? Direct rollovers to IRA accounts is normal after separation, when the balance is too small for the current plan to retain it. You can now do a direct transfer from the IRA savings account to your preferred IRA custodian or do a direct rollover into your current plan if your current plan accepts IRA rollovers. When you leave your current employer, your balance will probably be over 5,000, and automatic rollovers out of the plan are not allowed with balances over 5,000.