Saving for Retirement

Is Consolidating Your Retirement Accounts a Smart Idea?

Is Consolidating Your Retirement Accounts a Smart Idea?

Fifty years ago, it wasn’t at all unusual for an individual to work his or her entire adult life for the same company. Today, however, by the time they reach age 50, the average baby boomer will have held nearly twelve different jobs.1 In tandem with the wholesale shift away from pension plans to defined contribution plans, many people find themselves juggling multiple legacy retirement accounts that they’ve maintained at previous employers.

While multiple retirement plan accounts aren’t necessarily a bad thing, they can present a number of difficult challenges on the road to a successful retirement. Not only does it require a significant amount of time and attention to efficiently and effectively manage several different accounts, corporate retirement plans often have a limited number of investment options making effective asset allocation difficult. When it comes to taking distributions, it can be easier to do from one account instead of several.

Retirement accounts left with former employers are easily overlooked, sometimes leading to sub-par performance. And frequently, individuals who hold a multitude of funds in different plan accounts don’t realize that their investments aren’t as diversified as they imagined due to a significant overlap in fund holdings across the different accounts.

The advantages of a Rollover IRA

Aside from the simplicity and convenience of consolidating your multiple plans into a single account, Rollover IRAs can offer several additional benefits. Rather than a handful of fund choices selected by a plan administrator, Rollover IRAs typically have a far wider variety of available investment options.

A single Rollover IRA account may make asset allocation, portfolio rebalancing and performance tracking easier to manage, and IRA fees are often lower than the annual administrative fees commonly charged by retirement plans. In addition, if you plan on utilizing retirement plan assets to partially fund a home purchase or to pay for educational expenses, it may be possible for you to take penalty-free withdrawals from an IRA which you can’t do with a 401(k) account.

Lastly, when all of your retirement assets are consolidated in one place, it greatly simplifies the process of changing and/or updating your beneficiary designations.

It’s important to keep in mind, however, that a Rollover IRA may not be optimal if you hold company stock in your legacy retirement plan account, as you could forfeit some important tax benefits. Also, if you anticipate having to periodically borrow from your retirement savings for things other than a home or educational expenses, most 401(k) plans permit penalty-free and tax-free loans provided the loan is paid back within a five-year period whereas loans from an IRA account are not permitted.

There are a host of factors to consider when deciding whether to leave retirement plan assets at a previous employer, to take a distribution, to roll them over to your current employer’s plan or opt for a Rollover IRA. And the laws governing retirement assets and taxation are complex. So talk to your SunTrust advisor about the pros and cons of these various options to help figure out which may be best for your particular needs, goals and circumstances.

For more information about retirement, investing, and financial planning, consult with a SunTrust Investment Services Financial Advisor or learn more how SunTrust can help you with your retirement and investments needs.

1 U.S. Department of Labor, Bureau of Labor Statistics, March 2015

When it comes to rolling over savings from an employer-sponsored plan you have options. You can roll it over to an IRA. You could leave it with the employee or you could cash out. Before transferring your retirement assets to a SunTrust Investment Services, Inc. IRA rollover be sure to consider investment options and services, fees and expenses, withdrawal options, required minimum distributions, and tax treatment of each option and how they align with your financial needs and retirement plans.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.


Investment and Insurance Products:

Are Not FDIC or any other Government Agency Insured   Are Not Bank Guaranteed  May Lose Value 

© 2018 SunTrust Banks, Inc

equal housing logoSunTrust Bank is an Equal Housing Lender. Member FDIC

equal housing logoEqual Housing Lender. SunTrust Mortgage, Inc

SunTrust, SunTrust Mortgage, SunTrust PortfolioView, SunTrust Robinson Humphrey, SunTrust Premier Program, AMC Pinnacle, AMC Premier, Access 3, Signature Advantage Brokerage, Custom Choice Loan and SunTrust SummitView are federally registered service marks of SunTrust Banks, Inc. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of SunTrust Banks, Inc.: Banking products and services are provided by SunTrust Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank, SunTrust Delaware Trust Company and SunTrust Banks Trust Company (Cayman) Limited. Securities, brokerage accounts and insurance (including annuities) are offered by SunTrust Investment Services, Inc., a SEC registered broker-dealer, member FINRA, SIPC, and a licensed insurance agency. Investment advisory services are offered by SunTrust Advisory Services, Inc., a SEC registered adviser. GFO Advisory Services, LLC is a SEC registered investment adviser that provides investment advisory services to a group of private investment funds and other non-investment advisory services to affiliates. Mortgage products and services are provided by SunTrust Mortgage, Inc.

SunTrust Mortgage, Inc. - NMLS #2915, 901 Semmes Avenue, Richmond, VA 23224, 1-800-634-7928. CA: licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, IL: Illinois Residential Mortgage Licensee #MB-989, Department of Financial and Professional Regulation, 100 W. Randolph, Suite 900, Chicago, IL 60601, 1-888-473-4858, MA: Mortgage Lender license #-ML-2915, NJ: Mortgage Banker License - New Jersey Department of Banking and Insurance, NY: Licensed Mortgage Banker—NYS Department of Financial Services, and RI: Rhode Island Licensed Lender.

"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of SunTrust Banks, Inc.: SunTrust Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.

SunTrust Private Wealth Management, International Wealth Management, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups and GenSpring are marketing names used by SunTrust Bank, SunTrust Banks Trust Company (Cayman) Limited, SunTrust Delaware Trust Company, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.

SunTrust Bank and its affiliates do not accept fiduciary responsibility for all banking and investment account types offered. Please consult with your SunTrust representative to determine whether SunTrust and its affiliates have agreed to accept fiduciary responsibility for your account(s) and if you have completed the documentation necessary to establish a fiduciary relationship with SunTrust Bank or an affiliate. Additional information regarding account types and important disclosures may be found at

SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of SunTrust Banks, Inc. and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.