This article was originally published on U.S. News by Kristin McFarland, Wealth Advisor at Darrow Wealth Management.
MANY WORKERS LEAVE A 401(k) or 403(b) retirement plan behind after switching jobs for one of two reasons: they didn't know what to do with the account or they never got around to calling the plan provider to have the funds rolled over into an individual retirement account. For individuals in industries where turnover is common (such as biotech), leaving behind a string of old retirement investment plans can become a real problem – potentially impacting your retirement goals.
In most instances, rolling funds out of an old 401(k) plan and into an IRA only takes a matter of minutes. However, for some investors, the sticking point stems from a murky understanding of the drawbacks of keeping funds in old retirement plans.
It's way harder and more time-consuming to manage multiple retirement plans. Every retirement plan is essentially its own financial ecosystem. Each plan will have a unique fund lineup (which changes periodically), administrative procedures and expenses, online system and login, and financial institution where the retirement funds are held.