IRS, CFP Board Warn on $682 Billion 401(k) Rollovers as Fees and Taxes Threaten Savings
Updated
Updated · CNBC · Aug 24
IRS, CFP Board Warn on $682 Billion 401(k) Rollovers as Fees and Taxes Threaten Savings
3 articles · Updated · CNBC · Aug 24
Summary
$682 billion was rolled from workplace plans into IRAs in 2023, prompting new IRS and CFP Board guidance that warns rollover mistakes can be costly and often irreversible.
The guidance challenges two common assumptions: workers usually do not have to move money after changing jobs, and in most cases they cannot later roll IRA assets back into the old employer plan.
0.34 percentage points separated median retail and institutional stock-fund fees in 2019, according to Pew, a gap that can materially shrink retirement balances when savers leave lower-cost 401(k) plans for IRAs.
Nearly 6 million people made rollovers in 2023, up from about 4 million in the early 2000s, as retiring baby boomers drive more decisions over whether to keep assets in a 401(k) or seek IRA flexibility.