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Rollover IRA disclosures

The Trust Company operates under a special rule that requires us to act in your best interest and not put our interests ahead of yours.

When you first join The Trust Company, we provide you with an Investment Policy Statement that summarizes your specific needs, investment goals and expectations, serving as a guideline for designing your portfolio and for monitoring your financial plan on an ongoing basis.

We also provide a Fee Schedule – and our fee, except for certain unique assets, is charged as a percentage of total assets in your account, so we earn more compensation as your account value grows. The Trust Company does not add a mark-up for securities trading in your account and does not offer proprietary products or products offered by an affiliate or engage in any fee-driven recommendations. If we were to pay a referral fee to a third-party, it is taken from our fee. Below are a few of the pros and cons of a some of the options available related to a rollover of retirement plan assets to an IRA, or from an existing IRA to another IRA at The Sanibel Captiva Trust Company and its divisions.

Roll over your 401(k) to a Traditional IRA at SCTC

Pros:

  • Your money can continue to grow tax deferred.
  • You should have access to investment choices including individual stocks and bonds that are not available in your former employer's 401(k) or a new employer's plan.
  • You may be able to consolidate several retirement accounts into a single IRA to simplify management, and your fee can decline as you add more assets to your account per our Fee Schedule.
  • You may be able to stretch IRA distributions out over a longer period of time.
  • You will be assigned a dedicate team comprised of a Portfolio Manager who will actively manage your investments, a Client Services Associate for everyday contact and relationship management and have access to our professional staff and resources.
  • You will have access to personalized Financial Planning.

Cons:

  • You cannot borrow against an IRA as you can with a 401(k).
  • You may have higher fees than you would with the 401(k). Obtain your current fees to compare to our Fee Schedule.
  • Whether or not you are still working at age 72, required minimum distributions (RMDs) are required from Traditional IRAs.

Roll over your 401(k) to a Roth IRA at SCTC

Pros:

  • You can roll Roth 401(k) contributions and earnings directly into a Roth IRA tax-free.
  • Any additional contributions and earnings can grow tax-free.
  • You are not required to take RMDs.
  • You should have access to investment choices including individual stocks and bonds that are not available in your former employer's 401(k) or a new employer's plan.
  • You will be assigned a dedicate team comprised of a Portfolio Manager who will actively manage your investments, a Client Services Associate for everyday contact and relationship management and have access to our professional staff and resources.
  • You will have access to personalized Financial Planning.
  • You can consolidate multiple retirement accounts into a single Roth IRA to simplify management.

Roll over your 401(k) to a Roth IRA at SCTC (continued)

Cons:

  • You cannot borrow against a Roth IRA as you can with a 401(k).
  • Any Traditional 401(k) assets that are rolled into a Roth IRA are subject to taxes at the time of conversion.
  • You may pay annual fees or other fees for maintaining your Roth IRA, or you may face higher investing fees than you did with your 401(k). Obtain your current fees to compare to our Fee Schedule.
  • Your IRA assets are generally protected from creditors only in the case of bankruptcy.
  • Rolling over company stock may have negative tax implications.

Leave your money in your former employer's plan if your former employer permits it

Pros:

  • No immediate action is required.
  • Any earnings remain tax-deferred until you withdraw them.
  • You still have the option of rolling over to an IRA or to a 401(k) offered by a new employer in the future, if the new employer's plan accepts rollovers.
  • Under federal law, assets in a 401(k) are typically protected from claims by creditors.
  • Your former employer's plan may have lower administrative and/or investment fees and expenses than a new 401(k) or an IRA.
  • If you leave your job between ages 55 and 59½, you may be able to take penalty-free withdrawals.
  • Required minimum distributions (RMDs) may be delayed beyond age 72 if you are still working.

Cons:

  • If you hold stock in your former employer in the plan, you may have special tax or financial planning needs you should consider before rolling over your assets to a new employer's 401(k) or an IRA.
  • You can no longer contribute to a former employer's 401(k).
  • Your range of investment choices and your ability to transfer assets among funds may be limited.
  • Managing savings left in multiple plans can be complicated.
  • The fees and expenses for your former employer's 401(k) may be higher than those for a new employer's 401(k) or an IRA.

Rolling over an existing IRA into an IRA at SCTC

Pros:

  • Your money can continue to grow tax deferred.
  • You may be able to hold all of your investment and retirement accounts at SCTC to simplify investment management, and your fee may decline as you add more assets to your account per our Fee Schedule.
  • You will be assigned a dedicate team comprised of a Portfolio Manager who will actively manage your investments, a Client Services Associate for everyday contact and relationship management and have access to our professional staff and resources.
  • You will have access to personalized Financial Planning.

Cons:

  • You may pay higher fees than you did with your existing IRA.
  • You may not have the same investment performance as with your existing IRA.

A rollover of retirement plan assets to an IRA is not your only option and is an important decision. Carefully consider all of your available options which may include but not be limited to keeping your assets in your former employer’s plan; rolling over assets to a new employer’s plan; or taking a cash distribution (taxes and possible withdrawal penalties may apply). A rollover of an existing IRA to an IRA at SCTC is also not your only option and is an important decision. Prior to a decision, be sure to understand the benefits and limitations of your available options and consider factors such as differences in investment related expenses, plan or account fees, available investment options, distribution options, legal and creditor protections, the availability of loan provisions, tax treatment, state law considerations, and other concerns specific to your individual circumstances. Depending on the type of account you have, there are different rules for withdrawals, penalties, and distributions. Please consider all these factors before opening your account, and also consult our Trust Company professionals should you have any questions regarding these factors prior to opening your account.