Learn How to Take Control of Your Retirement Savings

Posted on 1-24-2023

This week, Craig Siminski, of CMS Retirement Income Planning, shares with us an article discussing four options that are often available for managing funds in an employer-sponsored retirement plan:

When you leave your job or retire, you have an opportunity to manage your funds in an employer-sponsored retirement plan such as a 401(k), 403(b), or government 457(b) plan. Depending on the situation, you generally have four options.


The approach that gives you the most control over the funds is to transfer some or all of the assets to an IRA through a rollover. IRAs typically offer a wider variety of investments than employer plans and enable you to consolidate your retirement assets in a single account. Moreover, the IRA is yours to keep and control, regardless of your employment situation.

You can generally transfer funds without tax consequences from a traditional employer account to a traditional IRA, or from a designated Roth employer account to a Roth IRA. Employer matching funds are allocated to a traditional account even if the employer matches your Roth contributions. So you may want to roll funds to both a traditional and a Roth IRA, depending on your situation.

If you want to move funds from a traditional employer account to a Roth IRA, the rollover is considered a conversion and you would owe income taxes on the taxable portion of the rollover amount (generally the whole amount minus any after-tax contributions). Under current tax law, if all conditions are met, the Roth IRA will incur no further income tax liability, regardless of how much growth the account experiences.

And unlike employer-sponsored plans and traditional IRAs, a Roth IRA is not subject to required minimum distributions during the original owner’s lifetime.

Be sure your rollover is executed properly to preserve the tax-advantaged status of the funds. You can typically arrange a direct rollover, also called a trustee-to-trustee transfer, by contacting the administrators of your old employer-sponsored plan and your IRA.

The transfer may be electronic, or you could receive a check made out to the receiving IRA trustee, which you should mail to…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 25 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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