Company vs Individual Retirement Plans

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Today we will be discussing whether company or individual retirement plans are better for ex-employees.

Deciding between retaining assets in a company-sponsored plan or moving them to an IRA. hinges on individual circumstances. Some individuals see benefits in keeping their investments with a company plan due to potential lower administrative fees, thanks to the company's negotiations based on total assets. However, an IRA offers a more expansive range of investment opportunities compared to the often limited options within company plans. Additionally, with an IRA, there's the advantage of not being tied to any company decisions that might influence your assets.

It's always a smart move for individuals to seek advice from financial experts to make choices that suit their unique situations.

From the company's perspective, if assets remain in the retirement plan, it can aid in fee negotiations and might assist in covering some plan costs, which can benefit current employees. However, managing assets of ex-employees demands added diligence. This involves ensuring consistent communication, locating unresponsive participants, and managing extra administrative tasks.

Therefore, companies have a choice to make: either retain ex-employee assets and bolster communication strategies or promote the rollover of assets to simplify administrative processes.

If you would like more information on company versus individual retirement plans for ex-employees,  contact us today.

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