4 Simple Options 401K Rollover Tampa Florida
Some transitions in life — such as retirement or a new job — may cause you to think about your 401(k) transfer options for your retirement savings accounts still at your old employer.
There are 4 possible choices in the below for an explanation of the pros and cons of each choice.
1.Rollover your assets into an IRA
- There are three primary advantages to a 401(k) rollover into an IRA and it is usually the most beneficial option depending on the 401(k) plans you have access to.
- Generally, an IRA will have more flexibility with access to thousands of investment choices.Usually, within a 401(k) plan, the investment options are limited. Often, these choices are sufficient for a properly diversified portfolio, but the plan may not have access to the best or lowest cost investment choices.
- One of the biggest advantages of the IRA rollover is the continued tax deferral.You maintain the tax-deferred treatment that was the benefit of the old workplace retirement plan, but you now have more options.
- Simplification and consolidation of retirement and investment accounts.Attempting to monitor any number of former workplace retirement accounts as you switch jobs throughout your career creates needless complexity. Consistently rolling over your plans to a single rollover IRA creates one account to monitor and select investments, making the portfolio management process easier.
2.Leave funds behind in old 401(k)
(If the plan allows) This option may or may not be available depending on the plan. As noted in Option 1, many plans have limited options and the combination of plan fees and fund expenses make it more beneficial to roll the plan assets into an IRA. A thorough analysis of the plan is required to make an appropriate choice.
3. Rollover your assets to your current employer’s plan
(If you have a new job and the plan allows) As with Option 2, this may or may not be available in your new workplace retirement plan. As noted in Option 1, many plans have limited options and the combination of plan fees and fund expenses make it more beneficial to roll the plan assets into an IRA. A thorough analysis of the plan is required to make an appropriate choice.
4. Cash out
(Taxes and withdrawal penalties may apply) Cashing out is usually the worst of the options. In addition to getting taxed and a 10% early withdrawal penalty if you are under age 59 ½, the employer is required to withhold 20% for the IRS so you will be unable to withdraw the full amount.
If you do not put the money into a qualified retirement account within 60 days, it is taxed as ordinary income. Furthermore, you no longer take advantage of the tax-deferred investment over time and the money that could have been generated over time.
3 Steps to Completing Your IRA Rollover
Consolidating your retirement accounts can be accomplished in three steps:
- Open your new retirement account or identify the account that will receive your rollover funds.
- Contact your current plan to initiate the rollover transaction – this typically requires completing some forms, and you will choose which rollover method you prefer.
- Confirm the transfer, either by depositing funds from a direct or 60-day rollover or validating that the direct rollover is complete.
The Best Option 401k Rollover
So, which option is best for you? Well, as the saying goes, “it depends”.
Each client situation is different and should be looked at in an individual manner.
No matter your situation, educate yourself first on the options and how they will impact your situation.
Once you are informed you can call the 401(k) providers or engage a professional to help you through the process.
A good place to start is to get an analysis done of your current portfolio to get a better idea of how it is invested and what the fees are, you will then have a good baseline established while doing your due diligence.
Mintco Financial 401k Rollover Specialists Tampa Florida
We are 401k rollover experts that can help you in exploring all of your rollover options.
We can help you make sure you maintain the tax-deferred status of all of your hard-earned dollars.
Our rollover assistance can help you obtain the greatest amount of investment flexibility available for your old 401k dollars as well as making sure these investments fit together properly with all of your other retirement savings.
Determining which option is best can be challenging for you. There is no “one size fits all” solution. The best choice will vary depending upon your unique financial needs and savings objectives.
Please contact us to see how we can take the stress out of this very important decision.
Learn how our unique Risk-Managed investment process can be a potential benefit to your overall financial well-being.
Call us at 813-964-7100
Email us at firstname.lastname@example.org