401K Rollover to IRA

401K Rollover to IRA2021-04-15T20:34:23+00:00

Is your 401k Plan Maximizing Your Benefits?

When you leave a job, your employer-sponsored retirement plan doesn’t automatically move with you. If you’re switching employers, or have old accounts just sitting around collecting dust, now’s the time to make important decisions that can impact your financial future and well-being.

Making the right decisions can help you protect your money’s tax-deferred growth, protect your future and stay on track to reach your retirement income goals.

There May Be a Better 401k Plan Option

Making an irreversible mistake may lead to a surprising tax bill, additional IRS penalties and lost opportunity to grow your future wealth and achieve a stable retirement income.

49% of Americans fear running out of money during retirement. As a taxpayer and saver, you’ve earned the right to see your savings grow in the most tax-efficient manner possible. Your biggest mistake? Doing nothing at all.

Intelliplan Financial can save you from costly tax pitfalls and help you choose the retirement option that is right for you.

Which 401K Rollover Options are Available?

Once retirement goals are set, we analyze the retirement plan, spot gaps and prioritize any resulting recommendations.

By rolling your 401(k), or other employer plan, into an IRA, you open yourself up to more investment flexibility. Within an IRA, you can use your money to purchase nearly any type of asset. You can purchase stocks, bonds, real estate, gold, international stocks and more. You can even opt for guarantees and purchase a fixed annuity or keep the money in cash or CDs. There’s almost no limit to your financial flexibility.

Key considerations:
-Tax-deferred growth.
-Investment options and fees.
-Tax-optimization strategies (including Roth conversions, backdoor Roth IRAs, etc.).
-Direct vs. indirect rollover.
-Required minimum distributions (RMDs).

Another popular rollover option is moving your funds into a fixed indexed annuity. These products are popular retirement income planning tools because they can be used to create guaranteed income in retirement—time after time—for as long as you live. For those getting closer to retirement, this can be a smart option to help you protect your retirement savings and create a reliable stream of income.

Key considerations:
-Principal protection.
-Predictable returns.
-Guaranteed income.
-Liquidity needs.

You may have the option to transfer the money into your new employer’s 401(k) plan. Not all employers allow a rollover from a previous employer. This option allows for easier tracking and the continuance of tax-deferred interest potential. However, your 401(k) investment options may be limited when compared to an IRA and you may be subject to your new employer rules, management fees and transaction limits.

Key considerations:
-New employer compatibility.
-Investment fees and options.
-Years until retirement.

While not always advisable, this is an option if your employer’s plan allows it, though you won’t be able to continue making contributions. Problem is you’ll be dealing with whatever limited service is offered to former employees.

Key considerations:
-Plan and investment options.
-Plan fees.
-Company stock ownership.
-Creditor protection.
-Updating beneficiaries.

Many people choose to cash out their 401(k) when they leave their employer. It’s easy to see why this is tempting. Many people view that 401(k) balance as “bonus” money. They use it to pay bills, buy something special or simply boost their savings account. Despite the temptation(s) (see what we did there?), cashing out a 401(k) plan isn’t wise, especially if you’re under age 59½.

Key considerations:
-Income taxes on account value.
-Penalties for early distribution.
-Damage to long-term retirement goals.

Which is the Right Option for Your Future?

All of these different options can seem overwhelming, but the great news is that you don’t have to decide by yourself. Schedule a complimentary consultation and we’ll walk through your different options and figure out what the best course of action is for your retirement income plan. You’ll walk away with a clear picture and solid next steps.

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