Benefits of consolidating retirement accounts
Benefits of consolidating retirement accounts - Online sex
However, because the GAO study was conducted during the Great Recession, which featured the lowest interest rates in over 75 years, fees outpaced returns in most Force-Out IRAs.The GAO concluded those types of account balances tended to decrease over time, finding that 13 of the 19 balances decreased to 40% of their initial value within 50 years.
It might take almost a decade for the account to disappear, in which time interest rates could significantly increase and change the outcome.But for now interest rates remain low, and it will likely be a long time before they return to pre-2007 levels.The report also points out that individuals who accrue multiple accounts over their careers may be unable to consolidate their accounts by rolling over savings from one employer’s plan into the next.Maintaining communications with multiple former employers or Auto Rollover providers can also be challenging, especially when companies merge, go out of business, or a plan terminates or merges into another plan.It also made several important recommendations to help protect the value of these assets and plan participants’ ability to collect their lost funds.As CEO of Pen Checks Trust™, one of the largest independent providers of administration and custodial services for Default/Missing Participant IRAs (and one of the firms interviewed by the GAO), I would like to present my analysis of this important document, focusing on three broad areas as covered in the report.
The timing of the study played an important role in many of the GAO’s conclusions.
For example, current Safe Harbor provisions guiding mandatory distributions (“Force-Outs”), require the funds to be invested in FDIC insured deposits, with no risk to principle.
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An Analysis of the November 2014 GAO Report to Congress In November 2014, the United States Government Accountability Office (GAO) submitted a report to the Senate Committee on Health, Education, Labor and Pensions entitled “401(K) Plans: Greater Protections Needed for Forced Transfers and Inactive Accounts.” The report studied what happens when employees change jobs and leave their retirement savings in their former employers’ 401(k) plans.