| Choosing to rollover 401K funds is a big decision. | | | | good choice. |
| These rollovers are nothing more than 'transfers' | | | | After dismissing the cash option, you can consider |
| of your money that is in a 401K retirement plan | | | | leaving your money where it is. Just let it sit with |
| that exists with your employer. Should you | | | | your old employer's plan. This can be a much |
| change jobs, then you have some options to | | | | better option than the cash option, because of |
| consider about just what is going to be the best | | | | dodging the tax liabilities and the penalties. But it |
| move for you to make with your investment. Do | | | | doesn't come without some of it's own downfalls. |
| you roll it over into an IRA? Do you take it out in | | | | Managing separate accounts can be quite |
| cash? Just what is going to be the wisest choice | | | | confusing and quite frankly, a headache to do. It |
| for you? The important thing is that you follow | | | | diminishes your ability to properly invest and focus |
| the 401k withdrawal rules. | | | | on what you need for your account. |
| You may choose to make a trustee to trustee | | | | You may also opt into your new employers |
| transfer that will move your 401K from the place | | | | retirement plan. Most new employers will allow |
| it resides now straight into an IRA account. When | | | | you to make the transfer from an old account |
| you choose this option, you get the benefit of not | | | | into their plans. This saves a lot of headaches for |
| being held liable for any taxes. You also don't have | | | | you and gives you more flexibility in managing |
| any type of limits on the amounts of cash that | | | | your money. It's just much easier to focus on |
| you can move. This can be a very important | | | | one account as you watch it grow and make |
| decision, because for the most part this type of | | | | decisions for increasing it for the most outcome. |
| move involves a very substantial amount of cash. | | | | When you roll your account over to an IRA you |
| Of course, the first option that comes to mind is | | | | solve a lot of problems. It's almost a sure bet |
| the 'cash' option. Just take the money and run. | | | | that with your old account you weren't getting |
| But this can be a very costly move. In fact, most | | | | any professional financial advice. But when you |
| investors consider this act to be the very worst | | | | step into an IRA account, you'll receive a licensed |
| of all your options. It will include lots of tax liability. | | | | advisor to help advise you on how to manage |
| Your employer is required to hold out a good | | | | your money and help you build a good portfolio |
| 20% right off the top for federal taxes. Then | | | | with good investing. |
| your cash is going to be taxed like it was regular | | | | Choosing to rollover 401K retirement funds is |
| income. And it just gets worse as you go on. | | | | usually a good idea. By transferring your cash into |
| You may find out the you actually owe MORE | | | | an IRA, you open yourself up to guidance in your |
| than the 20% that was taken out by your | | | | investing, and save yourself all the headaches of |
| employer. This depends on your tax bracket. If | | | | penalties and taxes that will cost you plenty. It |
| you happen to be under age 59, then additional | | | | provides more control and easier management. It |
| penalties may be applied, up to 10% more. So | | | | definitely is the best choice of the ones we |
| you can see how things can go from bad to | | | | mentioned above. Just make sure you follow the |
| worse whenever the cash option is chosen. Not | | | | all important 401k withdrawal rules and you'll have |
| to say that in some circumstances it's not | | | | no headaches. |
| beneficial, but all things considered, it's usually not a | | | | |