When you leave a job, and an IRA rollover is only one way to preserve the money’s tax-deferred status, and it's not always the best.
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IRAs typically offer many more investment options, a fact heavily emphasized by the financial services companies that want your money. Rollovers are big business — the Investment Company Institute, a trade group, reports that households transferred $463 billion from employer-sponsored plans to IRAs in 2017, the latest year for which statistics are available.
Also on MarketWatch: The ‘Great Resignation’: Heed these 8 tips from an employment lawyer before you quit Accessing your money can be harder with an IRA, as well. You can’t borrow money from an IRA for longer than 60 days, or it’s considered a taxable distribution. Any money you withdraw before age 59 1/2 is typically penalized as well as taxed, although the penalty is waived for certain withdrawals, such as for higher education or a first-home purchase.With 401s, by contrast, you can begin withdrawing money at age 55 without penalties if you no longer work for the company offering the plan.
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