Thinking about asset consolidation?

You may have retirement accounts with previous employers. Think about whether having your retirement money in more than one account is right for you.

What is asset consolidation?

Asset consolidation is just another way of saying moving your money into one account. If you have retirement accounts with former employers, think about if you want to manage separate accounts or manage one account—by rolling your money into your current employer's plan.

Roll in or stay put?

Examine your situation to make an informed decision about where to keep your assets. Consider:

  • Whether you want a single or separate view of all your retirement assets
  • How the accounts align your asset allocation with your goals
  • Available distribution options
  • Costs

Evaluate your options

Keep in mind that asset consolidation isn’t your only option. You also can leave your assets where they are, roll them into an IRA (different fee structures may apply), take a cash withdrawal (be aware of possible taxes and penalties), or use a combination of these options.

The right choice for you

The best choice for you depends on your personal situation, your goals, and the investment options, fees, and other details of your current employer’s plan.   

Considerations of workplace plans

  • Greater oversight. Fiduciaries of employer-sponsored plans are responsible for choosing an investment lineup that's in the best interests of employees.
  • Potentially lower fees. Thanks to institutional pricing, investment fees and other expenses in employer-sponsored plans may be lower than those in Individual Retirement Accounts (IRAs). Fee disclosure rules for workplace retirement plans also make it easy to compare the costs of retirement plans and IRAs.
  • Access to loans. Workplace retirement plans may allow you to take one or more loans from your savings. Keep in mind that taking loan from your retirement account can really cut into your progress toward your goals.

Considerations of IRAs

  • More investment choices. You may feel limited by your workplace plan’s investment lineup and are willing to pay potentially higher fees in exchange for more options. Many IRAs have a wider variety of choices than workplace plans.
  • Independence. Maybe you want some of your retirement savings to be independent of your employer. You can invest in an IRA through financial services groups or through a bank.
  • Potentially greater access to your money. You may take a distribution from your IRA at any time for any reason. Distributions are subject to normal income tax and, in some cases, a 10% penalty tax if they're made before you reach age 59½, unless certain conditions apply. The IRS permits IRA account owners to withdraw their funds penalty-free under certain circumstances, such as for qualified education expenses or a first-time home purchase. Standard income taxes still apply to these types of withdrawals.

Talk to a retirement plan representative so you can fully understand your options and make the decision that's right for you.

This material is provided by The Lincoln National Life Insurance Company, Fort Wayne, IN, and, in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY, and their applicable affiliates (collectively referred to as “Lincoln”).  This material is intended for general use with the public.  Lincoln does not provide investment advice, and this material is not intended to provide investment advice. Lincoln has financial interests that are served by the sale of Lincoln programs, products and services.