Skip to content
Financial Brokerage
  • Markets
    • Annuities
    • Disability Income
    • Employee Benefits
    • Final Expense
    • Health
    • Life Insurance
    • Long Term Care Insurance
    • Medicare
    • Worksite
    • All Markets
  • Contracting
  • Quotes
  • New Business
    • iGO-e-app
    • Drop Ticket
    • Medicare Supplement New Business Submission
    • Forms
    • Underwriting
      • Accelerated Underwriting Guide
      • Nailba Field Underwriting Guide
      • Underwriting Requirements
      • XRAE
  • Incentives
    • Incentive Trip
      • Napa Valley 2026
      • Cabo San Lucas 2025
    • Carrier Trips
    • Account Summary
    • Shared Success
    • Cash In on Your Success
    • Standings – See Where You Rank
  • Social Media
  • Services
    • Advanced Life Case-Design Specialist
    • Blog
    • Email Marketing & Newsletters
    • Website Hosting
  • Training
    •  Basic Training for Life Insurance Sales
  • About Us
  • Login
Presented by Jim Guynan When you change jobs, you may have an important decision to make…what to do with your money in an employer-sponsored retirement plan, such as a 401(k) plan. Since these funds were originally intended to help provide financial security during retirement, you need to carefully evaluate which of the following options will best ensure that these assets remain available to contribute to a financially-secure retirement. You can withdraw the funds in a lump sum and do what you please with them. This is, however, rarely a good idea unless you need the funds for an emergency. Consider: * A mandatory 20% federal income tax withholding will be subtracted from the lump sum you receive. * You may have to pay additional federal (and possibly state) income tax on the lump sum distribution, depending on your tax bracket (and the distribution may put you in a higher bracket). * Unless one of the exceptions is met, you may also have to pay a 10% premature distribution tax in addition to regular income tax. * The funds will no longer benefit from the tax-deferred growth of a qualified retirement plan. You can leave the funds in your previous employer’s retirement plan, where they will continue to grow on a tax-deferred basis. If you’re satisfied with the investment performance/options available, this may be a good alternative. Leaving the funds temporarily while you explore the various options open to you may also be a good alternative. (Note: If your vested balance in the retirement plan is $5,000 or less, you may be required to take a lump-sum distribution.) You can take the funds from the plan and roll them over, either to your new employer’s retirement plan (assuming the plan accepts rollovers), to a traditional IRA or, possibly, a Roth IRA, where you have more control over investment decisions. This approach offers the advantages of preserving the funds for use in retirement, while enabling them to continue to grow on a tax-deferred basis.
College Planning – Easy as 1,2,3,4,5
Make Wealth Transfer Easy

Leave a Reply

You must be logged in to post a comment.

Recent Posts

  • Direct-to-Consumer Life Insurance Sales
  • Seven Reasons To Offer Single Premium Whole Life
  • He said, she said…Long-term care solutions spouses can agree on
  • The BIG 3 Advantages of IUL
  • The Sequence of Returns Does It Really Matter in Retirement?

Archives

Categories

Meta

  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org
Financial Brokerage logo
  • 402-697-9998
  • 800-397-9999
  • 11301 Davenport St
  • Omaha, NE 68154-2629
  • About Us
  • Privacy Policy
  • Blog
  • Change Password
  • Facebook
  • Instagram
  • LinkedIn
  • YouTube
  • All rights reserved ©2022 Financial Brokerage.
  • For agent use only. Not for public distribution.
Theme by Colorlib Powered by WordPress