We always talk about rolling an employer-sponsored retirement plan into an IRA, but we rarely talk about the reverse scenario. Although an IRA rollover has many benefits, it's not always the best savings plan for your client's employees. Consider some reasons rolling IRA funds into their employer plan might make more sense for them.

Reason #1: You can't borrow from an IRA. Though we hope participants won't need this option, it's sometimes comforting to know it's there. With an IRA, participants can only take withdrawals and, depending on when they take them, they could be hit with a penalty. In an employer-provided retirement plan such as a 401(k) or 403(b), participants can often borrow up to half of their savings. For some, especially in a tight economy, this could be an important option to have available.

Reason #2: You'll have to wait longer to pull out your savings in an IRA. IRAs usually require you to be at least age 59 1/2 in order to withdraw without a penalty. With an employer-sponsored plan, employees may take penalty-free distributions if they separate employment at or after age 55.

Reason #3: There may be opportunities to save money in an employer-sponsored plan that are not available in an IRA. For example, if an employer's plan is large enough, employees may be able to access institutional funds, or funds without a load. In an IRA, employees may have to pay a load or higher management fees for the same funds.

Reason #4: Consolidating your retirement assets simplifies things. For some participants, having all their investments in one place is appealing since it makes managing and monitoring their investments easier.

Reason #5: Guidance is part of the plan. If you offer guidance or advice to participants as part of their employer sponsored plan, play up the fact that they can utilize this service to help them choose and manage their investments. With an IRA, they would have to hire an adviser or manage their money on their own.

You can help your clients' Human Resources department by providing knowledge on both retirement plans and IRAs, and at the same time you may be able to increase the level of assets in the plan. Regardless of where participants are saving, they will want their retirement to be the one they always dreamed of. Help them be sure they're saving the best possible way to make that happen.

Financial Finesse is the leading provider of unbiased financial education to organizations nationwide. For more information on Financial Finesse, visit www.financialfinesse.com.

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Rollovers go both ways: Five reasons to roll IRAs into employer plans

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