When I leave my job, should I leave my retirement funds in my employer’s 401K or other plan? That is rarely a good idea. The better option may be to roll over your benefits in the employer’s plan to your own IRA. First, many employer plans will not permit you to leave the funds there. Even if they do, the payout provisions of the employer’s plan may cause your family to pay income taxes sooner than they would otherwise have to when you pass away. In addition, the available investment options in your employer’s plan may be far more restrictive than you could arrange in an IRA. You should discuss the options available to you with your estate planning attorney.
-Attorney Jack N. Alpern