“In the vast majority of cases, people are better off rolling a 401(k) into an IRA,” says Mike Alfred, co-founder of BrightScope, an online 401(k) rating site.
Alfred was interviewed by financial columnist Janet Kidd Stewart, writing for the Chicago Tribune.
While workers should always weigh the pros and cons before making a final decision, rolling their 401(k) to an IRA will normally be the best choice.
Alfred says investment options in the IRA can be cheaper than those offered by all but the biggest plans, and IRA holders save money since they aren’t paying the record-keeping costs of a 401(k) plan.
Low-cost IRAs set up through a discount broker can “handily trounce mediocre 401(k) plans,” say the experts.