Moving a Retirement Account
When leaving an employer, you have three options for your retirement account: leave the money in the old plan, cash it out, or roll it over into a new account. Rolling over is often the best choice as it consolidates funds and offers more investment options.
How a Rollover IRA Works
An IRA (Individual Retirement Account) is a tax-advantaged account with various investment opportunities, including stocks, bonds, mutual funds, CDs, and ETFs. The 2025 contribution limit for a traditional IRA is $7,000 for those under 50 and $8,000 for those 50 or older.
- IRA contributions may be tax-deductible, depending on income, filing status, and workplace retirement plan.
- You can open an IRA at most big brokerages, with varying minimum deposit and balance requirements.
- No account minimum is required for active investing through a Schwab One® Brokerage Account.
Rolling the money over is often the best choice because it consolidates your retirement funds, plus gives you more investment options.
Author's summary: Rollover IRA consolidates retirement funds and offers investment options.