Rollovers: Easier than Ever

If you’ve worked for one or more employers in the past, you may have left your retirement assets in your former employer’s qualified plan. But many retirement savers find that having just one retirement account to manage is the easiest way to plan for a more secure retirement.

If you want to consider the "just one retirement account" approach, there’s good news: The money you have in your other retirement plan(s) can, most likely, be transferred to your current employer’s plan.1 And the smartest way to move your money is through a rollover.

What Is a rollover?

A rollover is the transfer of your retirement money from one qualified, tax-deferred retirement plan to another.

What Are the Advantages of Having Just One Retirement Account?

By gathering together your retirement assets in one place, it’s easier to manage your retirement strategy and to check your progress along the way. Consolidation offers:

  • Convenience—one statement, one website, one toll-free number to call, and one point of contact eliminates the hassle of dealing with multiple retirement plan providers.
  • Potentially lower cost—you won't be paying multiple account fees.
  • Easier to manage—having all your retirement money in one place may make managing your money easier.
  • Easier to maintain asset allocation—it may be easier for you to manage your retirement investments when you can see how they work together within a single plan.

What if Your New Plan Doesn’t Accept Rollovers?

Although most do, not every retirement plan accepts rollovers.

Your Vested Account Balance Is $5,000 or More

If your new plan does not allow rollovers, you have two options that would allow you to maintain your account's tax-deferred status:

  1. If you’re age 64 or younger, you can leave your money in your former employer’s retirement plan—and current taxes won't be due on your account balance until you begin to withdraw your money.
  2. You can roll over your retirement account balance into a traditional IRA.2 If you do a direct rollover—have the money transferred directly into your new IRA—you won’t be subject to the 20% withholding requirement.

Your Vested Account Balance Is Between $1,000 and $4,999

Your former employer may be required to automatically roll your money into an IRA on your behalf. If this occurs, there are no immediate tax consequences, because the money is moving from one tax-deferred account to another.

Your Vested Account Balance Is Less than $1,000

Your former employer may automatically distribute your account balance to you in a lump sum—and you will owe applicable taxes and penalties—unless you reinvest your funds in an IRA or another qualified retirement plan within sixty days.

Need Personal Assistance?

The rules concerning rollovers can be confusing. So you may want to contact a financial professional or a Prudential Certified Retirement Counselor* to learn more about your options. Simply call 1-877-PRU-2100 toll free, Monday through Friday, from 8 a.m. to 6 p.m., ET, and say "Retirement Counselor."

 

 

Rollover assets may be assessed fees or other surrender charges. Please contact current account provider for this information.

Retirement Counselors are registered representatives of Prudential Investment Management Services, LLC (PIMS).

* Many of Prudential Retirement’s Personal Retirement Services Retirement Counselors carry the distinct designation of Certified Retirement Consultants, an advanced certification available through the International Foundation for Retirement Education (InFRE). Certification includes mastery of retirement plan design, investment strategy, retirement income management, and retirement readiness and counseling.

Retirement Counselors may receive compensation based on a decision to either keep your funds in your employer-sponsored retirement plan or roll over to a Prudential IRA. These representatives receive additional compensation based on whether and how much you roll over to an IRA, and their compensation recognizes the additional services involved in the rollover process. Such compensation does not differ based on which Prudential IRA you choose or how your money is invested.

1 The ability to transfer assets from one retirement plan to another without tax consequences is based on IRS guidelines and plan provisions. Call Prudential Retirement at 1-877-PRU-2100 or contact your plan administrator for more information or to arrange a rollover.

2The IRA is not affiliated with the employer-sponsored plan or plan sponsor, and a rollover to an IRA means your funds are no longer part of an employer-sponsored plan and are not eligible for annuity payouts under the plan or the potential for insurance by the Pension Benefit Guaranty Corporation. Once assets are rolled over to an IRA, they normally cannot be rolled back to a former employer’s plan.

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