You may have had multiple jobs over your career, and left behind retirement account balances of critical building blocks for your retirement. Here is a short guide to your options of what to do with a retirement account left with a former employer:
Roll it over to an IRA
- A rollover IRA allows you to continue any tax-deferred growth.
- A direct rollover IRA helps you avoid current taxes and early withdrawal penalties.
- You retain flexibility to select investments that fit your specific needs.
- A rollover IRA allows you to consolidate your retirement assets in one convenient place when you change jobs or decide to retire.
Leave it in your plan
- Leaving your account in your former plan lets you continue any tax-deferred growth.
- As long as you don’t take money out before age 59½, you avoid federal income taxes and a 10% early withdrawal penalty.
- You always have the option to move your savings to another retirement plan later.
- You have continued access to your plan and its investment options, which may be perfectly suitable for your needs.
- You may be protected from creditors.
- You may benefit from lower fees than you would pay in other options.
Transfer it to your current qualified plan (401k, 403b)
- Transferring your account to your current plan lets you avoid current taxes, early withdrawal penalties, and continues any tax-deferred growth.
- Depending on your plan, you may be able to consolidate other retirement assets in one account.
- Your current plan may allow you to borrow from your account (although this generally is not recommended).
- You may be protected from creditors.
- You may benefit from lower fees than you would pay in other options.
You also have the option to take a withdrawal from your qualified plan account. Taking money now means you will have money right now, but it could come at a price of an early withdrawal penalty and taxes due.
Have more questions?Consult your benefits administrator or advisor for guidance on the option that’s most appropriate for your individual circumstances. Travis Financial Services consultants can help you sift through the many options. Visit traviscu.org/TFS or call us at (888) 449-6030 to set up an appointment today!
Travis Financial Services
Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. LPL Financial and its advisors are providing educational services only and are not able to provide participants with investment advice specific to their particular needs. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com
© 2018 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.
The financial consultants at Travis Financial Services are registered representatives with, and securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA / SIPC). Insurance products are offered through LPL or its licensed affiliates. Travis Credit Union and Travis Financial Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Travis Financial Services, and may also be employees of Travis Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Travis Credit Union or Travis Financial Services. Securities and insurance offered through LPL or its affiliates are:
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Not Credit Union Guaranteed
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Not Credit Union Deposits or Obligations
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May Lose Value
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