Making a Career Move
If you are thinking about changing jobs, or you have recently made a career move, it's time to take a fresh look at your financial plan. Specifically, you should look at the funds in your employer-sponsored retirement plan account. Your decision about what to do with your money can have significant tax consequences.
Rolling over your money
You can transfer the money in your former employer's plan to an Individual Retirement Account (IRA) or possibly to your new employer's plan. To ensure that the rollover from your retirement plan account remains tax-deferred, you must deposit the entire amount in a new IRA or plan account within 60 days. You can avoid tax withholding and penalties by asking for a direct transfer or trustee to trustee transfer of your retirement account balance.
Leaving your assets in your current retirement plan account
You might be able to leave the funds in your former employer's plan where they can grow, tax-deferred. Generally, you will still be able to choose your investments, but you won't be able to make additional contributions. Leaving your funds in the plan might be a good idea if you have significant assets invested and are comfortable with the investment choices offered.
Taking a lump sum
You can always take a lump-sum payout from your plan. However, not only would you owe taxes and possible penalties on the distribution, you would lose the future tax advantages of your retirement nest egg as well.
Contact a Money Concepts Client Advisor today to see which option works best with your financial goals.
