WHAT TO DO WITH YOUR RETIREMENT PLAN

One of the biggest decisions you are faced with when you change jobs is what to do with the assets you’ve accumulated in your company-sponsored retirement plan. Contact your current and former plan administrator for specific terms. In general, you have four distribution options:

• Establish a Rollover IRA. For most investors who are changing jobs or retiring, rolling over their distribution to an IRA may be an easy and inexpensive way to maintain the continued benefit of tax-deferral. IRAs offer an expanded array of investment options but may not have some of the benefits of qualified plans.
• Leave the money invested in your former employer’s plan. This leaves your investment options intact, but your plan options may change, possibly making the money less accessible. Contact your former employer plan administrator for more information.
• Move the money to your new employer’s plan. This may allow you to keep your assets invested in a comparable plan, but investment choices may be limited. There may also be a waiting period before rolling money into the plan.
• Take your retirement plan distribution in cash. This gives you your cash for immediate use, but at a huge cost: 20% withholding, taxation, plus a 10% early withdrawal penalty if you are under age 59 ^1/2.

IRA: A Logical Choice

The primary advantage of a Rollover IRA is the control you have over the assets: you decide where you want to invest, when to withdraw and/or transfer the funds, and how to change your investments as your needs change or the market shifts. In addition, IRAs are:

• Easy to establish. A Rollover IRA can be set up simply by choosing an IRA provider, and authorizing them to transfer the assets of your old plan to your IRA. A Financial Advisor can assist you with your IRA investment choices.
• Easy to track. You can receive a consolidated statement containing all of your IRA investment information.
• Easy to make additional contributions. You may contribute up to the maximum annual contribution amount per year of which all, or a portion, may be tax-deductible. See chart below.

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The information provided in this Web site is not intended to be nor should it be construed as tax or legal advice. As with any tax planning matter or strategy, please consult with your attorney and/or tax advisor.