Remember that company you worked for years ago and have pretty much cut all ties to? Except, that is, for the retirement account you left behind.

Many people don’t know what to do with their retirement accounts (401(k), 403(b), 457, etc.) when they leave a job. It can be difficult to evaluate the pros and cons of leaving it as is or moving it out. And everyone has a busy life, so the inertia of just letting things be is the easy choice to make.

But is the right choice? While there are some potential advantages to leaving a retirement account with an old employer, we think rolling over those old accounts to an IRA has some significant advantages for most investors, as outlined below.

More or better investment options – An IRA brokerage account typically offers thousands of mutual funds as well as stock and bond trading, providing much more flexibility than most employer-based plans, which are usually limited to a short list (10-20) of mutual funds.

Potentially lower fees – The fees in different employer plans are often high, as they are a combination of two factors – the underlying fees of the investment options and the fees to administer the plan. The total fees are often hard to determine, but in some cases amount to 2-3% per year.

Consolidation – If you have numerous retirement plans floating out there, odds are you are not paying much attention to them. By consolidating various accounts into a single IRA, you reduce the complexity of managing the portfolio and reduce the amount of time needed to review your accounts and investment options.

Modus Advisors assists many of our clients in evaluating their old employer retirement plans and deciding whether to roll them into an IRA or not. Please call us at (952) 946-1000, or toll-free (877) 946-1012, if you are looking for help on a rollover.

Our much more detailed look into IRA rollovers can be found here.