It happens to the best of us: you opt into your employer’s retirement plan and then “set it and forget it,” or you open Individual Retirement Accounts (IRAs) at various companies. You go about your daily life, all the while, savings are automatically added to your employer retirement plan and you make contributions to your IRAs. But what happens to those retirement assets when life changes (retirement, job change)?
It might be time to consider moving those assets from your current retirement plan into an IRA with Thrivent Mutual Funds. You certainly should understand all your options, weigh the pros and cons, and make a choice which is right for your goals and circumstances.
While you can move your IRAs anytime you choose, if you experience any of the following life events, a rollover from an employer-sponsored retirement plan may be an option for you depending on the actions allowed under the plan document:
Note: you can only make ONE indirect rollover of assets from an IRA once in any 12-month period, no matter how many IRAs you have.
It’s important to consider your needs and circumstances when looking to move your retirement assets. Some factors to keep in mind include:
Compare the options you currently have with the options available with Thrivent Mutual Funds. Look at the investment fees and other expenses, as well as the variety of options available.
Plans and providers potentially offer a variety of account services you may want. Compare current services and conveniences to those available with Thrivent Mutual Funds. With consolidation and having all your retirement assets in one place, it may be easier to manage your accounts and monitor your progress.
Both IRAs and employer-sponsored plans may offer options you want or need. Compare access to early withdrawals, loans, employer stock considerations, required minimum distributions and the frequency distributions are available. Some plans may restrict the frequency of withdrawals.
IRA distributions that are used for certain non-retirement purposes, such as a first-time home purchase1 or qualified education expenses, are exempt from the 10% federal penalty tax that typically applies to distributions taken prior to age 59½. And as long as you still have earned income, you can continue to make contributions to the IRA.
Generally, employer-sponsored plans have unlimited protection from creditors under federal law. IRA assets are less protected and laws vary by state.
You can rollover or transfer assets from almost any kind of retirement plan, the most common include2:
You’ve worked so hard for your retirement assets, so before you move them, it’s important to do your homework and to make a decision which is right for you. Here’s a quick comparison of other available options:
If you’ve decided to initiate a rollover or transfer of your retirement assets, there are several steps you need to take, regardless of the financial institutions involved. At a high-level, these are the steps:
Note: These steps (and even their order) may vary according to the type of rollover/transfer at different financial institutions.
After carefully reviewing your options and taking into account your needs and circumstances, if you choose to move your retirement assets into an IRA with Thrivent Mutual Funds, you’ll have access to a variety of mutual fund offerings to help you save for retirement. You can build your own portfolio based on your risk tolerance and time horizon, or contact an experienced Thrivent financial professional for help when you need it.4
1No penalty on up to $10,000 of distribution you receive to buy or build a first home. You qualify for a first-time home purchase if you or your spouse has not owned a home in the previous two years.
2Roth IRAs, Roth 401(k)s and Roth 403(b)s can only be rolled or transferred into a Roth IRA. During the first two years of participation, a SIMPLE IRA can only be rolled or transferred into another SIMPLE IRA.
3Please discuss your options for appreciated employer stock with your tax advisor.
4Thrivent financial professionals are registered representatives of Thrivent Investment Management Inc., an SEC-registered investment adviser, a broker/dealer, and a member FINRA/SIPC. Thrivent Investment Management Inc. is a subsidiary of Thrivent.