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When Changing Jobs, Rollovers Bring Benefits

Consolidating retirement accounts can help your retirement immensely

For many individuals, changing jobs can be an exciting opportunity to advance their careers or pursue new interests. However, it can also present a challenge when managing retirement savings. When switching jobs, individuals may need to rollover their retirement accounts from their previous employer’s plan to a new plan, which can be a complicated and time-consuming process. Your financial advisor can make this process easier to help you stay on track with your retirement savings.

Retirement savings is a critical aspect of financial planning. For most people, workplace retirement plans such as 401(k)s, 403(b)s, and 457 plans are the primary way they save for retirement. However, as individuals change jobs throughout their careers, they may accumulate multiple retirement accounts, making it difficult to keep track of and manage their savings effectively. Moreover, having multiple accounts can lead to unnecessary fees, and inconsistent investment choices can be challenging to coordinate.

Rollovers Matter

Transferring a retirement account from one employer plan to another is called a rollover. A rollover can be complex and time-consuming, requiring individuals to navigate a range of tax and legal requirements.

According to a study by the Transamerica Center for Retirement Studies:

  • Almost half of workers surveyed (45%) were unaware of what to do with their retirement savings when changing jobs;
  • Over half of workers (51%) actively choose to transfer their retirement savings when changing jobs; and
  • Almost a third of those who leave their savings in their previous employer’s plan (31%) do so because they find moving their savings too complicated.

Your Financial Advisor

Your financial advisor can solve these problems, help you consolidate your retirement accounts, and streamline the rollover process. The benefits of your advisor helping you do this are significant.

It makes the rollover process much more accessible for individuals. By automating much of the process, your advisor removes the hassle and uncertainty of moving retirement savings between employers. Workers can be confident that their savings are being transferred efficiently and cost-effectively and that their retirement planning is not disrupted by job changes.

Your advisor can help you avoid unnecessary fees and charges. Individuals with multiple retirement accounts may be paying duplicate fees and expenses for each account. By consolidating retirement savings, you reduce the number of accounts and fees paid, which helps you save money over the long term and keep more of your retirement savings working for you.

Your advisor can help you make better investment decisions. When you have multiple retirement accounts, coordinating investment strategies across them can be challenging. By consolidating retirement accounts, developing a comprehensive investment plan aligned with your retirement goals is more manageable.

As more and more workers change jobs throughout their careers, consolidating retirement accounts is becoming increasingly important. It is an excellent option for individuals who want to simplify their retirement savings and invest in their future.

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