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What to know about retirement account rollover

Employees should carefully consider options for their retirement savings when leaving a job, including leaving it in the former employer’s plan. The fees for this plan may be lower, but you will need to compare. (Some employers won’t let you leave your money if the balance is low.)

Here are some questions and answers about rolling over retirement balances:

Typically, you can find a fund’s expense ratio, often titled “the fund’s total annual operating expenses,” on its management company’s website or in the fund’s prospectus.

The Financial Industry Regulatory Authority, a private group that regulates brokerage firms, offers an online service fund analyzer which allows you to compare information about different funds, including expenses.

Administrators of 401(k) plans are required to disclose fund expenses, but to research from the Government Accountability Office suggests that many participants have difficulty using the information.

Ask for the reasoning behind advice because advisors can earn fees by managing your money in an IRA Since July 1, advisors must provide written documentation explaining why a recommended rollover is in your best interest, says Nevin E. Adams , spokesperson for the American Retirement Association, an industry group. The mandate is part of the rules recently adopted by the Ministry of Labour.

You can’t contribute to a former employer’s 401(k) plan, said Heather Winston, director of financial planning and advice at Principal Financial Group. So if you leave it behind, you should contribute to a new account to keep your retirement savings on track. Sticking with an employer plan means you’re limited to the company’s menu of investments, she said, while an IRA can offer more options.

Also, it can be difficult to keep track of multiple accounts if you change jobs multiple times, said Michael J. Garry, founder and chief executive of Yardley Wealth Management. Grouping them into an IRA can make it easier to properly allocate funds among different types of investments.