August 10, 2016

401k Rollovers

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When people change jobs or retire, they must decide what to do with the assets that they have accumulated in their 401k retirement savings plan. This decision is critically important because it can affect their ability to achieve the type of lifestyle they expect in retirement.

Here are the options you have:

Options

Pros Cons

Leave the money in 401k plan of company you’re leaving

Money continues to grow tax-deferred

 Less you will know about company and how it’s managing their retirement plan

            Liquidate

          Immediate access to savings
  • No longer tax-deferred therefore subject to tax payments
  • Possible early withdrawal penalty

Rollover 401(k) to new plan

     Money grows tax-deferred
  • Subject to distribution rules of plan
  • Limited investment choices
  • Little or no investment advice
Rollover to IRA
  • Money grows tax-deferred
  • Investment flexibility
  • Flexible beneficiary designations and distribution options

Outstanding loans on a plan must be repaid

Wayne Messmer & Associates can help by:

  • Discussing your current situation and goals.
  • Reviewing all the pros and cons of all your options including Roth IRA rollovers.
  • Making recommendations assessing your goals and your options to fit your “financial roadmap.”

If you would like to discuss your options further, please call 888-265-7443.