Should I Roll Over My 401(k)?

Individual Retirement Accounts > Rollover IRA > Should I roll over my 401(k)?

Thinking of rolling over your employer-
sponsored retirement plan to a Rollover IRA?

If you have a workplace retirement plan from a former employer, consider all your choices. You may be able to roll over to a traditional IRA or Roth IRA, move to a new employer's plan, leave the account where it is or take a lump-sum distribution. Each has different advantages and disadvantages in terms of investments, fees, withdrawal rules, required minimum distributions, taxes and protection from creditors. As you evaluate your choices, carefully review the information provided to find the one that best fits your retirement goals. Learn more about the Merrill Edge Rollover IRA.
    Traditional IRA Roth IRA Move to New Employer's Plan Stay in Former Employer's Plan
Account Management & Investment Choices
Can you consolidate your accounts? Yes Varies by plan
What is the range of investment choices? May offer more investment choices than an employer-sponsored plan — including stocks, bonds, options, ETFs, mutual funds (when investing online) and managed portfolios (available through Merrill Edge Guided Investing* or Merrill Edge Select® Portfolios*) Varies by plan, but may be limited
Can you make "in kind" transfers of investments from current plan? Varies by plan and investment type
Can you work with an advisor to get investment guidance? Yes, Merrill Edge Financial Solutions Advisors™ Varies by plan
Is there access to additional online tools and resources? Yes Varies by plan
Taxes
Is growth tax-advantaged? Yes Yes1 Yes
Can you make new tax-advantaged contributions? Possibly, depending on the IRA holder's (and his or her spouse's) modified adjusted gross income and access to a workplace retirement plan Roth contributions are made on an after-tax basis, and the ability to contribute is subject to modified adjusted gross income limitations Yes No
Is there special tax treatment for appreciated company stock? Yes Certain assets may be eligible for Net Unrealized Appreciation (NUA) tax treatment when distributed from a former employer's plan; consult your tax advisor for details
    Traditional IRA Roth IRA Move to New Employer's Plan Stay in Former Employer's Plan
Withdrawals
Can you roll over into an employer's plan at a future date? Yes, subject to employer plan rules No Yes, subject to employer plan rules
Can you take a loan from the account? No Varies by planFootnote 2 Generally, no
Is there an additional tax for early withdrawals? Yes, 10% before age 59½ Yes, 10% before age 59½ on earningsFootnote 3 Yes, 10% before age 59½
Are there any exceptions to the additional tax for early withdrawals? Yes, for example, for qualifying home purchases or college expenses Yes, if a plan's rules allow hardship distributions, then some forms of distribution may qualify for an exception to the early withdrawal additional tax; for example, qualifying home purchases or college expenses
Can you withdraw without paying the early withdrawal tax once you are 55? No Yes, if the payment is made after you left your new job and you attained at least age 55 in the year you terminated employment Yes, if the payment is made after you left your old job and you attained at least age 55 in the year you terminated employment
Are there required minimum distributions (RMDs) starting at 70½? Yes Not if you are the original account holder Generally not, if you are still workingFootnote 4 Yes
Fees
What are the fees? Online Investing and Trading
(Self-Directed Investing)

No annual account fee for online investing and trading accounts, but account closure, transaction and investment fees may apply

Merrill Edge Guided Investing
A 0.45% annual program feeFootnote 5 for the Merrill Edge Guided Investing account; other fees may apply*

Merrill Edge Select® Portfolios
A 0.85% annual program feeFootnote 6 for a Merrill Edge Select® Portfolios account; other fees may apply*
Varies by plan
Other
Are assets protected from creditors? In federal bankruptcies, but state laws vary Yes
Is there an account minimum? No Varies by plan

What about a lump-sum distribution?

You may also consider taking a lump-sum distribution from your old employer-sponsored plan if you're facing extraordinary financial circumstances, but this option comes at a high price. Any pretax contributions and associated earnings will be taxed as ordinary income, plus you may be subject to an early withdrawal tax of 10% if you are under age 59½ (unless an exception applies). Your distribution generally will also be subject to a mandatory 20% federal income tax withholding.
Help when you want it
Turn to us for step-by-step guidance when you have questions or need help getting the most out of your investing
experience. Meet with a local Merrill Edge Financial Solutions Advisor™ to help you get on track and stay on track.
Call 24/7, 888.637.3343
Call 24/7
888.637.3343
to speak with a Merrill Edge
rollover specialist
Please review the Merrill Edge Guided Investing Program Brochure at merrilledge.com/guided-investing-program-brochure for important information including pricing, rebalancing, and the details of the investment advisory program.

Your recommended investment strategy will be based solely on the information you provide to us for this specific investment goal and is separate from any other advisory program offered with us. This program is not offered through an advisor.

The Merrill Edge Select® Portfolios are part of the Merrill Edge Advisory Program and require participation in the program to invest. In addition the Merrill Edge Advisory Program is sponsored by Managed Account Advisors (MAA) an affiliate of MLPF&S. MLPF&S and Managed Account Advisors LLC (MAA) are registered investment advisers. Investment Adviser registration does not imply a certain level of skill of training.

For full fee details, please see the Merrill Edge Advisory Account ADV brochure. Program fees include portfolio management and trading costs. In addition to the annual program fee, funds within each portfolio have their own expenses, as would individual securities. Other fees may include those mandated by the SEC; transfer, exchange and fund-redemption fees; conditional deferred sales charges; and markups or markdowns.

Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Footnote 1 Earnings are generally not subject to federal income tax if a 5-year holding period requirement is met and the account owner is at least 59½ at the time such distribution is made.

Footnote 2 Loans must usually be repaid within 60 days of leaving your job to avoid treatment of the loan as a distribution and subjecting it to federal income tax, and potentially a 10% early withdrawal additional tax.

Footnote 3 The early withdrawal tax does not apply to withdrawals of contributions to a Roth IRA. However, there is a 10% additional tax if earnings are withdrawn before the end of a 5-year holding period even if you are over age 59½.

Footnote 4 Dependent on plan terms.

Footnote 5 There is an annual fee of 0.45% based on the assets held in the account. This fee is charged monthly in advance.

Footnote 6 There is an annual fee of 0.85% on the assets held in the account. This fee is charged monthly in advance. For additional information on the annual fee please see the Merrill Edge Advisory Account program Form ADV brochure.

Immediate tax consequences will apply to some of these distribution options. You may also be subject to a 10% additional tax if you take a withdrawal prior to attaining age 59½.

* Sales are subject to a transaction fee of $0.01 to $0.03 per $1,000 of principal. There are costs associated with owning ETFs as well as mutual funds. Annual program fees include portfolio management and trading costs, as well as ongoing support. In addition to the annual program fee, the mutual funds and ETFs within each program have their own expenses, as would individual securities. Other fees not included in the annual program fee may include those mandated by the SEC; transfer, exchange and fund-redemption fees; conditional deferred sales charges; and markups or markdowns. For full fee details, please refer to the ADV brochure for the relevant program available at either merrilledge.com/guided-investing-program-brochure or merrilledge.com/advisory-account-program-brochure. Where possible, institutional mutual fund class shares are used to minimize expenses.

Investing in securities involves risks; there is always the potential of losing money when you invest in securities.

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