It might not be best to roll over a plan sponsored account. Consider these factors first:

  1. Investment Options – Compare the options available in your plan with the ones available through your ShareBuilder account.
  2. Fees & Expenses – Take a look at the investment-related expenses and the plan and management fees, and compare those to the trading and investment-related expenses at ShareBuilder.
  3. Service – Consider the services that you may get with the plan (like investment advice, educational material, planning tools, etc.), and determine where you get the right amount of service for your accounts.
  4. Withdrawals – Depending on your age, some plans may allow for penalty-free withdrawals after your employment terminates. Check with your plan sponsor for these rules. IRAs generally have penalties for early withdrawals prior to age 59½.
  5. Protection from Creditors/Legal Action – Most plans have unlimited protection from creditors under federal law, while IRA assets are protected in bankruptcy proceedings only. State laws vary in the protection of IRA assets in lawsuits.
  6. Required Minimum Distributions – Plans generally don’t require minimum distributions as long as you still work. IRAs require minimum distributions at age 70½, regardless of whether you are working or not.
  7. Employer Stock – If you hold company stock that has appreciated in value, consider the negative tax consequences of rolling that stock to an IRA. If the stock is rolled over in-kind to an IRA, the gains will be taxed as ordinary income when you make withdrawals.

Check out our Knowledge Center for more information.