Roadmap to Qualified Plan Rollovers
Your Journey from Pre-Retirement through Retirement
You've worked hard through the years and saved diligently for retirement. You have accumulated savings in your 401K, 403B or other employee pension plan. Perhaps you have done this in conjunction with savings in the myriad of IRA plans available to investors today.
The common thread we all have is that we knew that one day these savings would be used to support the life we will lead when we are no longer working. Inevitably, that day does come and decisions need to be made on how to best secure our nest egg.
Decisions and Choices
No matter how you envision your life in retirement, now is the time to identify investment options that take full advantage of you resources. A sound investment strategy will better align your expectations with reality and help ensure your money will last throughout your retirement years.
Four Options for Your Qualified Retirement Funds
- Do Nothing
Leave it in your former employer's plan. If your plan balance is less than $5,000, this option is available only if the plan allows it. - Transfer it
Transfer it to your new employer's plan. Current tax laws make this easier to do, but each plan still has its own rules for what assets it will accept. - Take it
Take the money as cash. The downside of this option is that you'll pay substantial taxes, including a 10% penalty tax if you're under age 59-1/2, and you may put your future retirement at risk. - Roll it
Roll over the money into an IRA. Money from a 401k, 403b, a profit-sharing plan, money purchase plan, and even a 457 plan can all be invested in a rollover IRA.
IRA Rollover Advantages
- Avoid Current Taxes
When you transfer into a rollover IRA, you avoid all tax consequences that you would incur if you took a cash withdrawal. You don't have to pay current taxes, or the 10% tax penalty if you're under age 59-1/2. - Preserve Tax Benefits
In a retirement plan, the taxes on your potential earnings are deferred until you take withdrawals in retirement. Earnings generally can compound faster when taxes are postponed. When you transfer your retirement money to a rollover IRA, taxes on your earnings will continue to be deferred until you begin making withdrawals from your account. - More Investment Options
Retirement plans typically offer a much narrower range of investment options than those you can choose from within an IRA. A full range of investment products are available to meet your objectives, and risk tolerance. - Avoid Putting Your Future at Risk
Cashing out a lump sum can be tempting. It may be the largest sum of money you've ever had your hands on. But when you see that sum - or a little more than half of it after taxes - to use for today's needs, you could be putting your retirement at risk. That amount could potentially grow to a substantial amount that could make your retirement dreams a reality.
Before you Start
- Speak with you spouse, family or partner about lifestyle and financial expectations for retirement.
- Review the most recent versions of you social security and investment statements. If there are questions, now is the time to seek out answers.
- Gather all the paperwork necessary to create an up-to-date overview of your financial situation. Which accounts are qualified plan assets and which are non-qualified assets?
We Can Help
It is easy to become overwhelmed by all the financial decisions that you must make at retirement. The most important part of the process is to consult a qualified financial professional to make sure you are prepared for this new and exciting stage of you life.
Our Investment Executives at Ulster Savings Bank can assist you with the process outlined. We have the expertise, knowledge and products to meet the variety of needs and concerns that customers have. In the process, we will maintain the highest level of respect and confidentiality that you deserve while making these important decisions.
For more information, call one of our Investment Executives at (866) 440-0391 Ext. 3315.
 |
 |
PRIMEVEST Financial Services, Inc. is an independent registered broker/dealer and registered investment adviser. Member FINRA/SIPC. Securities and insurance products offered by PRIMEVEST: *Not FDIC insured * May go down in value * Not financial institution guaranteed * Not a deposit * Not insured by any federal government agency. Advisory services may only be offered by Investment Adviser Representatives in connection with an appropriate PRIMEVEST Advisory Services Agreement and disclosure brochure as provided. * Neither PRIMEVEST nor any of its representatives may give legal or tax advice. FINRA Registered Branch: 180 Schwenk Drive, Kingston, N.Y. 12401
View PRIMEVEST privacy policy and other important information.
Investment Executives are registered to conduct securities business and licensed to conduct insurance business in limited states. Response to, or contact with residents of other states will only be made upon compliance with applicable licensing and registration requirements. The information in this website is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase brokerage services to persons outside of the United States.
