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Making a Smart Rollover Decision

Making a Smart Rollover Decision

| May 01, 2020

Separation of service from employment will often present options on how to handle your workplace retirement plan.  One of those options is rolling over the assets from your plan to an IRA. This can be a great move as IRAs typically offer more investment choices while allowing you to continue accumulating earnings on a tax-deferred basis. 

However, making a rollover mistake can have a dramatic impact on your income in retirement. For example, if you personally receive the funds from your 401(k) or other workplace savings plan and fail to move them into an IRA within 60 days, your assets will lose their tax-deferred status. You may also have to pay a penalty of 10% or more.

Before deciding whether to retain assets in a 401(k) or rollover to an IRA, consider these factors:

  • Investment options
  • Fees and expenses
  • Services
  • Withdrawal penalties
  • Protection from creditors and legal judgments
  • Required minimum distributions
  • Possession of employer stock

Clearly, it’s important to handle your hard-earned retirement savings with care. Please reach out if you have any questions about how to initiate an IRA rollover or would like to discuss the advantages of consolidating your retirement assets in one easy-to-manage account.

Before considering a rollover all available options should be considered which include remaining with your current retirement plan, rolling over into a new employer's plan or IRA, or cashing out the account value. Rollover options may carry significant penalties, especially for individuals under the age of 59 ½. Please consult a tax professional or attorney prior to making any financial decisions.