Should you stay with your 401(k) plan when you retire?

You’ve worked hard to save for retirement and now you’re ready to take the next step. After years of working, you still have the opportunity to keep your retirement savings with your employer, even after you’ve left. There are arguments to be made to stay, just as there are reasons to roll over your money into an individual retirement account (IRA).

Before deciding “should I stay or should I go” from your workplace retirement plan consider the following to help make an informed choice.

Understand the fees and features 

Fees are an important part of the equation for most investors, but access to special services or investments may also be on your priority list. Your workplace savings plan may benefit from special pricing available to larger groups of individuals, so you may end up with higher fees if you leave your plan. At the same time, some investors favor specialized services and a breadth of investment options that are more likely to be available outside of their plan. Review the annual and one-time charges in writing so you can compare the fees for the 401(k) or other workplace plan and IRA side by side.

Know the standards of conduct applicable to your account

The vast majority of workplace savings plan sponsors have a fiduciary responsibility to select and monitor investments with your best interests in mind.¹ Knowing that professionals keep an eye on fees, performance and suitability can be a valuable benefit. While the personalized, holistic attention of an investment advisor managing your IRA may also be an attractive option, many financial advisors follow a less strict standard in the advice they provide. In some circumstances they may suggest products to you based on the commissions they earn. Be sure to ask any advisor you may be considering how he or she works to protect your interests.

Consider any retirement income features 

Some workplace retirement plans are designed to help meet your needs even after you retire. It’s important to find out what your plan will do for you, including offering flexible distribution options or retirement calculators to help you understand how much you can spend each month. Alternatively, some IRA accounts may give you greater control over when and how you withdraw retirement funds — and may offer retirement distribution products and services beyond what’s available in your employer plan.

There are also regulations regarding when you can make withdrawals from different account types. For example, if you are over age 55 and no longer working, you can take withdrawals from your 401(k) without being subject to a 10% penalty. In an IRA account, you must wait until you are 59½.²

Think about consolidating to keep an eye on your savings 

Unless you want to keep access to specific investments or services, consolidating retirement plans can make it easier to manage your investments instead of maintaining multiple accounts. You may have the option to consolidate any previous retirement accounts with your current company, which could help you better monitor and adjust your investments based on your objectives.