Should you rollover 401k or IRA assets to WealthStep Direct?

Rollovers from 401k’s: WealthStep does not recommend rolling out of your current 401k plan into WealthStep Direct if your current 401k already uses WealthStep, because WealthStep Direct involves certain costs, even if they are relatively low, that your 401k plan may not (e.g. transaction costs that are covered/included in your 401k plan).  If your employer’s 401k does not use WealthStep, it could still make sense to leave your money in that plan, if it is a low-cost plan, and if you that plan offers Target Date Funds or other pre-built life-stage portfolio options that are high-quality, low-cost, highly diversified, conflict-free and require minimal maintenance. However, many 401k plans do not offer Aim-Save-Invest advice like WealthStep.

However, it can make sense to roll over to WealthStep Direct if you have needs that are not met by your 401k plan that can be addressed by WealthStep Direct. For example, if your 401k plan only allows lump-sum distributions (which requires that you must take your entire balance out of the 401k when you need to take even $1 out), WealtStep Direct can be an effective solution to maintain a similar approach to your 401k.

If you have a non-WealthStep 401k that does not have high-quality, low-cost, highly-diversified portfolios with no conflicts-of-interest, a WealthStep IRA can be an excellent solution.

Rollovers from IRA’s: If your current non-WealthStep IRA account has low-cost Target Date Funds or other pre-built life-stage portfolio options that are highly diversified, low-cost, conflict-free and require minimal maintenance, it may make sense to leave the assets where they are. However, if planning/saving/investing/spending advice/education/reminders are not provided through your current non-WealthStep IRA, it can be worth the slightly higher cost (or in some cases lower cost) of WealthStep to have advice and portfolio management integrated. An integrated approach can improve results through improved investor behavior, and through tax-efficiency improvements by coordinating your IRA account wisely with non-taxable accounts (if applicable for certain sized WealthStep accounts).

Many WealthStep clients use WealthStep Direct IRA accounts as a “home base” where they roll over balances from their 401k and/or IRA accounts as they change jobs over time, to centralize and simplify their retirement assets.