IRS Compliant IRA and 401k Rollover
You have a few options with your 401k plan from a former employer.
In almost all cases, a transfer to an IRA Rollover account is the best option for wise investors.
For long term retirement security it is imperative to have a sound savings plan such as an IRA and control and flexibility are key to ensuring financial success.
Included in your choices are these options:
You can transfer the money into a Traditional IRA or IRA Rollover account (Request Information on IRA Rollovers) - these accounts offer the same tax deferred status as 401k plans but offer you more flexibility and control of your investment options.
If the you opt for a Traditional IRA, you can also continue to contribute up to the annual limit.
You could leave the money where it is - one drawback of this method
as that you must rely on your former employer for account management
You can pay a penalty, take the money out, and spend it. This option
is strongly advised against as you would be subject to both the 10% IRS
withdrawal penalty (up to age 59 1/2) and the withdrawal would be taxed
as ordinary income
With Atlantic Financial, your accounts will handled by a
professional who is able to offer far more advice than most order
takers at fund companies and other discount brokers. You will never
receive high pressure sales pitches and we only give advice when it
Clients of Atlantic Financial have access to over 18,000 mutual funds.
Information provided by Oppenheimer Funds
When you leave your employer to start a new job or retire, there's no doubt you're dealing with change and the stress that goes along with it. With everything you have to think about, deciding what to do with your accumulated retirement savings is probably the last thing on your mind. But it's the one decision you can't afford to put off.
The Results Last a Lifetime
That money you've worked so hard to save will probably be one of your biggest sources of income during your retirement.
You're facing an important choice: what to do with your retirement savings. And what you decide now will shape your future quality of life. It could mean the difference between enjoying a comfortable retirement and struggling to make ends meet.
You have several options to choose from and it's important that you know the facts before you make a decision. Discuss your options with your financial advisor to ensure that you are choosing the one that's right for your own situation.
Know Your Options
You can do one of four things with the money you've accumulated in your employer's plan:
|1. Take the Cash||2. Transfer the money to your new employer's plan|
You get the money right away
Easy access to your retirement savings
Immediate resources if you have no other source of income
You pay no penalties or taxes
You maintain tax-deferred status of your retirement savings
You might be eligible for loans from your new employer
You consolidate your old retirement savings with your new ones
To get that money, you’ll have to pay a high price
-500 state tax
$5,700 could be all you see of your original $10,000.
Even worse, you lose the opportunity to let that money continue to grow tax deferred.
Not all employers provide this option
You may not be eligible to join the retirement plan until you’ve provided a year of service
The new plan may offer few investment options
Your ability to control and access your money may
|3. Leave the money in your employer's plan||4. Roll the Money into an Oppenheimer Funds IRA.|
Requires no effort and you pay no penalties or taxes
You maintain tax-deferred status of your
You may continue to be eligible for loan provisions
from your previous employer
You pay no penalties or taxes while your savings
continue to grow tax deferred
You can choose from more than 60 time-tested funds
representing most asset classes that can help you and your financial advisor build a well-diversified portfolio
Your retirement savings are consolidated into a “nest egg you never have to move again—but you can move the money into a future employer’s plan if you wish
Online and phone-based tools give you easy, anytime access to your account
You can work with a professional financial advisor to manage your retirement investments
Your employer’s plan may not allow this option
The plan may not offer many investment choices
You have limited access to, and control of, your money
You’re leaving your money with a former employer
If the value of your account is less than $1,000 your account can be cashed out by your previous employer. However, if the value of the account is between $1,000 and $5,000, the money may be automatically rolled into an IRA. Check with your previous employer to see if they have a cash-out provision.
Care must be taken to ensure the assets are transferred properly and expediently. Working with your financial advisor may limit these concerns
1. Hypothetical example assumes a 28% federal tax rate, a 5% state tax rate and a 10% early withdrawal penalty tax. Your tax rates may be higher or lower.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
Begin Your IRA Rollover
If you would like assistance rolling over an existing retirement plan, opening a new IRA account or if you have any questions please call 1-800-559-2900, email us (please be sure to include your name and phone number in your email) or contact us
More Information: 401k Rollover | Roth IRAs | SEP IRAs | Traditional IRAs
Atlantic Financial has been serving clients on the Internet since
1994 and enjoys a solid reputation for service, selection and value.
We can review your
financial plan, assist with your
401k Rollover or
and answer your retirement questions.
Be sure your are working to be in compliance with regulations, see the IRS website, IRS 401k Rules and Regulations or speak with a financial advisor from Atlantic Financial
Call 1-800-559-2900 and ask to speak with an Investment Advisor.