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If you’ve worked at several jobs, you may have a few 401k-type plans from previous employers plus your own IRA accounts. Managing all those accounts can be a real challenge. You may want to consider a direct transfer of your account balances under these plans into a single IRA - without paying taxes on the transaction, if done properly. Once in the new IRA, your money has the opportunity to continue to grow federal income tax-deferred.
A rollover IRA is not a different IRA.
It’s a Traditional IRA or Roth IRA that you are using to consolidate your retirement accounts.
Most plans qualify.
You can do a tax-free direct rollover from most employer-sponsored plans including 401k, 403b, 457 plans, and SEP IRAs. While rolling over may help simplify your recordkeeping, it’s important to remember that employer plans may have benefits and services that are not available with an IRA. An employer plan may allow loans, while IRA’s may not. An employer-sponsored plan may permit penalty free withdrawals at age 55 and offer different creditor protections, so you may want to speak to a financial professional to discuss all of the differences to see what option is best for you.
One simple statement.
Once you’ve completed your rollover, you can see the performance of your whole retirement plan on one statement. Just think of how easy it will be to track your investments, avoid duplications, and get a clearer understanding of your retirement investment picture.
Different investment choices.
Some 401k plans may limit your investment choices, but a Rollover IRA can open up your investing opportunities. But if you like your 401k investment options, you might not want to roll you money over because they may not be available with an IRA.
Little chance of orphan accounts.
With just one account, there’s almost no chance you’ll lose track of it or even forget about it.
Keep on rollin’.
Should you change jobs again, you may be able to roll that previous employer plan into your IRA as well.
The Insurance Plaza can help.
An Insurance plaza retirement consultant can help you review and compare all of your options, explain the federal income tax consequences of each and help you make a decision that is right for your situation – whether it’s staying put, cashing out, rolling into an IRA, or into your new employer’s plan. Or, if you're ready to roll over, schedule an appointment with a retirement consultant today 888-449-4977 Note: Retirement consultants are not attorneys and cannot provide legal and/or tax advice.
Carefully consider the provisions of your current retirement plan and the new product for important differences before transferring assets. Such differences include but are not limited to available investment options, fees and expenses, benefits, potential withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and tax consequences of rolling over employer stock to an IRA. This is not intended to provide legal or tax advice. You should consult your own legal and tax advisors regarding your situation.
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