IRS Eases 401(k) Rollovers as $682 Billion Shift to IRAs Draws Fee Warnings

3 articles · Updated · Benzinga · Aug 25

Aug. 12 IRS guidance proposes optional sample forms and procedures to speed rollovers between workplace retirement plans and into IRAs, with public comments open through Oct. 23.
Nearly 6 million people rolled money over in 2023, sending $682 billion into IRAs, but CFP Board guidance says workers usually do not have to move assets after leaving a job and often cannot reverse the decision.
Fees are a central risk: Pew found median retail mutual-fund fees ran 0.34 percentage points above institutional shares in 2019, a 37% gap that could cut 2018 retirees' savings by $45.5 billion over 25 years.
IRAs can offer broader investment choice than 401(k)s, yet employer plans may provide fiduciary oversight, loans and some withdrawal features, leaving advisers to weigh costs, flexibility and conflicts before recommending a rollover.