If you’ve changed jobs multiple times, chances are you’re juggling multiple retirement accounts from past employers. While leaving your funds in an old employer’s plan is an option (as long as the balance is over $5,000), consolidating your accounts through a rollover could simplify managing your retirement portfolio. 

What are the Advantages of Consolidation Through a Rollover?

Consolidating your retirement accounts could potentially make managing your portfolio easier since you have a single view of your investments in one place. Instead of tracking multiple accounts with different statements, fees, and options, rolling over funds into one plan or an IRA simplifies the process, which in turn, can help you make more informed investment decisions.


There are other potential advantages of consolidating with a rollover, including:


  • Wider range of investment choices: If your old employer’s plan had limited options, consolidating into a new plan or an IRA with more diversified investments may benefit your portfolio.
  • Possible lower fees: Compare the fees of your old and current plans. Moving to a plan with lower fees can help you preserve your retirement savings.
  • Greater satisfaction with overall retirement plan: If neither your old nor current plan meets your needs, rolling over funds into an IRA offers flexibility and broader investment opportunities.

How to Initiate a Rollover

The process of rolling over funds is relatively simple:


  1. Check your plan rules: Confirm that your current retirement plan or chosen IRA provider allows rollovers (most do).
  2. Contact the administrator of your old plan: Use your old plan’s quarterly statement to locate the administrator’s contact information and request information regarding the rollover process.
  3. Follow the rollover process: Depending on the provider, you may need to complete an online request or a paper-based form from your old plan/administrator. Keep in mind, many providers offer rollover services to streamline the transfer, so your new plan provider may be able to initiate this on your behalf.

Rollover vs. Distribution

Before you go through the consolidation and rollover process, It’s essential you know the  difference between a rollover and a distribution:

A rollover involves transferring funds from one qualified retirement account to another without tax penalties, provided it’s completed within 60 days.

A distribution is a withdrawal from your account that incurs taxes and, if you’re under 59½, an additional 10% early withdrawal penalty. Federal law requires 20% withholding for taxes on distributions.

Seek Professional Guidance

Rollovers can be an excellent financial move, but it’s crucial you evaluate the investment options, fees, and rules of your plans. For personalized advice, Space Age Credit Union always advises you first consult a financial advisor. Did you know members of Space Age Credit Union can access free consultations with Todd A. Dussex, CFP© and Financial Planner with LPL Financial located inside Space Age Credit Union. 

By understanding the benefits and following these simple steps for a rollover, you can ensure your retirement savings work harder for you. For more resources, visit Space Age Credit Union or contact us today.