Pros and Cons on leaving 403b or 401k with previous employer after retirement.
Would like to know the advantage or disadvantage to leaving the proceeds in a 403b or 401k with the previous employer have an employee retires?
Would like to know the advantage or disadvantage to leaving the proceeds in a 403b or 401k with the previous employer have an employee retires?
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Permalink Submitted by Alan - IRA critic on Mon, 2017-05-15 19:54
There are several factors, but most of them apply differently to different plan participants. For example, creditor protection under ERISA plans is the best possible, but for IRAs it depends on the state where you live. Most states protect IRAs, but a few like CA offer only limited creditor protection. That said, some taxpayers may feel that they have limited exposure to creditors. Moreover, protection against marital settlements and IRS liens does not exist for any type plan. There are many other factors. For example, it is better for a spouse to inherit an IRA because they will likely have to roll the plan over to an IRA anyway to reduce their RMDs and those of their own beneficiaries. Here is an article that gets into more of these factors, but again some factors may be important to you and others not so much: http://www.iscebs.org/Documents/PDF/bqpublic/bq414f.pdf