The average American worker stays at a job only 4.2 years, and many had funded retirement accounts they’ve left with the employer’s plan custodian when they moved to a new job. Leaving retirement savings at multiple employers can create higher investment costs to keep the account in former employer plans or create an inconvenience to maintain and rebalance.
This drawback may lead investors to consider rolling over their retirement savings plans or other investments to another advisor to manage or to a new fund custodian. Many times your new advisor will assist with you with the transfer paperwork, but what can you do before completing the Transfer Initiation Form (TIF) to understand the process and help ensure an efficient rollover’?
- Check with the custodian of the account regardless of the type of account you have to see if a rollover is even possible. Considerations for a roll-over include the time the account has been open and any fees associated with the ‘outgoing transfer.’ If you’re still employed and your assets are in your employer plan, and you want to move them to another advisor or custodian to manage, additional rules may apply.
- Ask for all transfer out paperwork from the custodian and if other signatures or a ‘signature medallion stamp’ will be required on the paperwork to complete the transfer. Signature Medallion stamps guarantee the account. Your financial institution or new fund company may be able to provide the medallion stamp for you.
- Include the account statement with your transfer paperwork that includes your name and address, the account number(s), and is dated in the last six months.
- Realize that you have options where you transfer your account and the type of investments available to you. Discuss these options with your advisor.
- Understand the fees associated with moving your money to a new account. Your advisor will explain the charges to you during the rollover initiation meeting as you’re reviewing the TIF form and associated paperwork.
- Be patient. Some fund custodians process their TIFs very slowly. Ask your financial advisor to keep in touch with you regarding the progress of the transfer. If you aren’t informed that the transfer has completed within a month, check in with your advisor for followup.
If you have retirement savings plans at multiple former employers or with multiple advisors, I can help you manage your assets in one place and help navigate the transfer process for you. Having an active role in financial planning includes bringing assets together to allow you more investment choices and on-going monitoring, not leaving them where you can’t actively manage them.