If you’ve decided to perform an IRA rollover, you’ll obviously need to an IRA rollover account provider to receive the funds. But before you choose your provider, make sure you’ve considered all of the various types of accounts into which you can rollover your IRA, from a traditional IRA to a Roth IRA. Think about which rollover IRA account type makes the most sense for your short and long term financial goals. Made your decision? Great! Now it’s time to choose an account provider.
If your employer offers some form of retirement savings plan, such as a 401k or 403b, be sure to consider that provider, as this is a very convenient option for your IRA rollover. You aren’t limited to that provider, of course, as you can also open a number of different types of IRAs as an individual. However, know that a retirement account set up through your employer may offer advantages that an individual account can’t. For example, one of the most important advantages you may get by choosing the retirement savings plan offered through your employer is matching contributions.
On the other hand, those matching contributions may not mean much if the retirement savings plan your employer offers doesn’t have a good track record of return on investment. For tis reason, it may make sense to put some of your retirement savings into your employer’s plan, but perform an IRA rollover transfer that moves most of your account funds into a privately-held retirement savings vehicle. To determine which choice is right for you, you’ll have to compare plans carefully before choosing your provider.
Next, you’ll want to be sure to pick an account provider that offers the type of rollover IRA account you’re looking for. Chances are you’ll find a number of different providers that offer the type of account you want, so how do you choose? You might find it helpful to create a grid where you can jot down the information you uncover about each potential provider. This will allow you to compare “apples to apples,” as they say, and will help you to base your decision on sound information.
Consider also the amount of money required to open the IRA rollover account. Chances are this will be of little consequence if you’re using IRA rollover money, as you’ve likely already accumulated more than the amount required in your existing accounts.
In addition, you should consider the fees charged by plan administrators. Fees are usually charged annually, and will vary from provider to provider. Be sure to read the fine print for any commissions or fees charged when you make investment changes. You want to make sure that as much of your money as possible stays in your IRA rollover account, rather than being paid to account administrators.
Next, look at the average performance of the IRA rollover accounts managed by the providers you’re considering. Of course, past performance is just that – past. It’s no indicator or guarantee of how a particular account will perform in the future. However, looking at how a number of different providers have fared over the past five years will give you a basis for comparison to consider before initiating your IRA rollover.
Finally, give some thought to customer service. Were the people you spoke with helpful and patient? Was the documentation you received easy to read and understand and did you get clear answers to your questions? Did you feel pressured to make a decision? Keep in mind that you’ll likely be working with your provider for a number of years, so you’ll want to go with a rollover IRA account provider that treats you – not just your money – with respect and dignity.