Consumers approaching retirement may be faced with various investment decisions.
Purchasing a life insurance policy is one option for those hoping to ensure their survivors’ financial security.
Traditional and Roth IRAs may also be beneficial. However, rolling funds from a 401(k) to this kind of investment may be difficult for some, according to a report by the Wall Street Journal, with many employers hoping to hold onto their workers’ savings.
“Big IRA players are fighting back,” the report said. “Firms like Charles Schwab Corp., Fidelity Investments and Scottrade in recent months have rolled out new online calculators, blogs and other features in an effort to boost their IRA business.”
Consumers may consider withdrawing from the 401(k) if they cannot get clear information on the fees they pay. They need to access savings before age 59 1/2, or they would prefer greater investment options, according to the report. Leaving funds in a 401(k) will allow them to avoid taxes incurred from rolling into a Roth IRA.
Keeping an employee’s savings enables companies to increase their asset base, giving them more leverage when negotiating with retirement plan providers. However, allocating them in a Roth allows individuals to avoid withdrawal taxes.