Rollover options comparison chart

Benefits

Your money has the potential to keep growing tax-deferred.

You can consolidate multiple retirement accounts.

Your money has the potential to keep growing tax-deferred.

You can keep your assets in the same investments.

Your money has the potential to keep growing tax-deferred.

You have your retirement assets conveniently consolidated with one provider.

You have cash in hand to take care of current needs.

Keep in mind

Roth 401(k) or 403(b) accounts will be rolled into a Roth IRA. Non-Roth accounts can be rolled into a traditional or Roth IRA. You’ll be responsible for any unpaid taxes on the taxable portion of a Roth IRA rollover.

You can avoid required minimum distributions over your lifetime with a Roth IRA. With retirement plan accounts and traditional IRAs, you’re generally required to withdraw a certain amount every year once you reach age 72 (70-1/2 for those born before July 1, 1949).

If you’re rolling to a traditional IRA, make sure the rollover funds go directly from your old plan’s trustee to the rollover IRA’s trustee or custodian to avoid having income tax withheld on the taxable portion of your distribution.

Your investment options are limited to what is offered in the plan.

You’re still subject to the rules and restrictions of the plan.

If your account balance is $1,000 or less, your plan might cash you out. If your balance is between $1,000 and $5,000, your plan might roll your balance into an IRA selected by your former employer.

The plan may not accept certain types of rollovers from other plans, or Roth or after-tax money.

Make sure the rollover funds go directly from your old plan’s trustee to your new plan’s trustee to avoid having income tax withheld on the taxable portion of your distribution.

There may be a waiting period before you can move your money into your new plan.

Your investment options are limited to what is offered in your new plan.

You’re subject to the rules and restrictions of your new plan.

To roll a retirement plan account from a former employer to a new American Funds plan, you’ll need an Incoming Rollover Request form, available from the American Funds plan’s representative.

Money you spend now won’t be there for you later.

Your employer must withhold 20% of the taxable portion of your distribution for federal income taxes. You may owe more at tax time.

A 10% early withdrawal penalty may apply if you’re under age 59-1/2. If you’re 55 or older when you leave your job, withdrawals are penalty-free but still taxable. Other exceptions may apply.

Withdrawals from Roth accounts are tax- and penalty-free if the account was established at least five years before, and if you are at least 59-1/2 years of age, are disabled or have died.

You may owe state and local taxes on the taxable portion of your distribution.