Have you recently switched jobs?
If so, there are some very important decisions
that you are faced with regarding your retirement plan. Usually you
will have three options to choose from., You can leave the plan with
your previous employer, roll your old plan over to your new company or
you can establish a 401(k) rollover.
What are my options?
Most investors do not choose to keep their assets
in a company sponsored retirement plan because of the limited
investment options available. Most 401(k) and profit sharing plans
only give you eight to twelve different investment options. Company
sponsored plans also do not allow contributions for former employees.
Rolling your account into your new company may be
an acceptable option if you are certain you will be working there for
a significant amount of time and if the plan is particularly good. A
rollover to your new employer will allow you to keep your retirement
consolidated and may be a simple matter. Again, you may run into the
drawback of limited investment choices in a corporate plan.
With a 401(k) Rollover IRA account at a
qualified investment company, you can invest in almost any mutual fund,
stock, bond, or other investment vehicle you so desire. This account
is only limited by the selection of investments offered by the
investment company and the types of investments authorized for retirement
accounts by the IRS. This flexibility makes the 401(k) IRA Rollover
option the most appealing. IRA Rollover accounts, unlike traditional
IRA accounts and Roth IRAs can also be rolled into employer 401k plans
at a future date.
How does it work? The first step in the 401(k)
rollover process is to select an investment company and an advisor to
work with. One way to receive objective investment advice is to
select an advisor at an independent firm. One benefit of
independent advisors is that they are not tied to in-house proprietary
products and have more incentive to objectively recommend the
investments best suited for their clients. Independent firms also
usually offer a wider selection of investment options.
Once a firm and an advisor have been selected,
the process of rolling the funds over can begin. You start by opening
a Rollover IRA account. This account will give you the same tax
deferral advantages of your 401k plan, combining it with a much
wider range of investment options. With most firms, the only expenses
associated with the account are the annual maintenance fees (if any),
and standard mutual fund loads and commissions on trades you pay
anyway. Remember that with a Rollover IRA, you cannot make the same
annual contributions you could with a traditional or Roth IRA.
After the rollover account has been opened, you
can have your representative actually transfer the funds. This
process will depend in large part on the company that holds the plan
you had with your former employer. In most cases, you will have to
fill out a distribution form that you will submit to your former
employer. Larger companies usually have standard forms and sometimes
departments that facilitate the rollovers, in these cases the process
may be as simple as providing the former employer with the new account
number given to you by your rep. With a smaller company you will
usually need to deal with the investment company used by your former
employer, this will often consist of having your new investment
representative send a form to the investment company requesting your
assets. The ideal way to transfer the funds is to have your employer
send the funds directly to your new investment company, you can also
either have a check made out to you (60 day rollover) or made out to
the company holding your Rollover IRA (direct rollover). You may want
to avoid transferring the investments that you hold in the 401(k)
account (such as mutual funds) directly into your new account and have
cash transferred. A cash transfer is usually the quickest and most
efficient transfer method.
What are the Penalties?
There are usually no penalties, tax or
otherwise, that you incur when rolling over a 401(k) from the new
provider but could be from the old provider, depending on the
situation. However, if you do a 60 day rollover (meaning the check
you receive is made out to you) and take possession of the funds, you
will be penalized on any amount that you do not put into your rollover
account within 60 days. Remember that in a rollover IRA, like a 401k
or any other qualified retirement plan, there is a 10% penalty for the
early withdrawal of funds (before age 59 ½) and withdrawals are taxed
at your normal tax rate. Therefore, unless you are using the money
for one of the free early distributions (first time homebuyer,
qualified higher education expenses, etc.), you should make it a
priority to keep these funds invested in a retirement plan.
Abington Massachusetts
Acton Massachusetts
Acushnet Massachusetts
Adams Massachusetts
Agawam Massachusetts
Alford Massachusetts
Amesbury Massachusetts
Amherst Massachusetts
Andover Massachusetts
Aquinnah (Gay Head) Massachusetts
Arlington Massachusetts
Ashburnham Massachusetts
Ashby Massachusetts
Ashfield Massachusetts
Ashland Massachusetts
Athol Massachusetts
Attleboro Massachusetts
Auburn Massachusetts
Avon Massachusetts
Ayer
Barnstable Massachusetts
Barre Massachusetts
Becket Massachusetts
Bedford Massachusetts
Belchertown Massachusetts
Bellingham Massachusetts
Belmont Massachusetts
Berkley Massachusetts
Berlin Massachusetts
Bernardston Massachusetts
Beverly Massachusetts
Billerica Massachusetts
Blackstone Massachusetts
Blandford Massachusetts
Bolton Massachusetts
Boston Massachusetts
Bourne Massachusetts
Boxborough Massachusetts
Boxford Massachusetts
Boylston Massachusetts
Braintree Massachusetts
Brewster Massachusetts
Bridgewater Massachusetts
Brimfield Massachusetts
Brockton Massachusetts
Brookfield Massachusetts
Brookline Massachusetts
Buckland Massachusetts
Burlington
Cambridge Massachusetts
Canton Massachusetts
Carlisle Massachusetts
Carver Massachusetts
Charlemont Massachusetts
Charlton Massachusetts
Chatham Massachusetts
Chelmsford Massachusetts
Chelsea Massachusetts
Cheshire Massachusetts
Chester Massachusetts
Chesterfield Massachusetts
Chicopee Massachusetts
Chilmark Massachusetts
Clarksburg Massachusetts
Clinton Massachusetts
Cohasset Massachusetts
Colrain Massachusetts
Concord Massachusetts
Conway Massachusetts
Cummington
Dalton Massachusetts
Danvers Massachusetts
Dartmouth Massachusetts
Dedham Massachusetts
Deerfield Massachusetts
Dennis Massachusetts
Dighton Massachusetts
Douglas Massachusetts
Dover Massachusetts
Dracut Massachusetts
Dudley Massachusetts
Dunstable Massachusetts
Duxbury
East Bridgewater Massachusetts
East Brookfield Massachusetts
East Longmeadow Massachusetts
Eastham Massachusetts
Easthampton Massachusetts
Easton Massachusetts
Edgartown Massachusetts
Egremont Massachusetts
Erving Massachusetts
Essex Massachusetts
Everett
Fairhaven Massachusetts
Fall River Massachusetts
Falmouth Massachusetts
Fitchburg Massachusetts
Florida Massachusetts
Foxborough Massachusetts
Framingham Massachusetts
Franklin Massachusetts
Freetown
Gardner Massachusetts
Gay Head (Aquinnah) Massachusetts
Georgetown Massachusetts
Gill Massachusetts
Gloucester Massachusetts
Goshen Massachusetts
Gosnold Massachusetts
Grafton Massachusetts
Granby Massachusetts
Granville Massachusetts
Great Barrington Massachusetts
Greenfield Massachusetts
Groton Massachusetts
Groveland
Hadley Massachusetts
Halifax Massachusetts
Hamilton Massachusetts
Hampden Massachusetts
Hancock Massachusetts
Hanover Massachusetts
Hanson Massachusetts
Hardwick Massachusetts
Harvard Massachusetts
Harwich Massachusetts
Hatfield Massachusetts
Haverhill Massachusetts
Hawley Massachusetts
Heath Massachusetts
Hingham Massachusetts
Hinsdale Massachusetts
Holbrook Massachusetts
Holden Massachusetts
Holland Massachusetts
Holliston Massachusetts
Holyoke Massachusetts
Hopedale Massachusetts
Hopkinton Massachusetts
Hubbardston Massachusetts
Hudson Massachusetts
Hull Massachusetts
Huntington
Ipswich
Kingston
Lakeville Massachusetts
Lancaster Massachusetts
Lanesborough Massachusetts
Lawrence Massachusetts
Lee Massachusetts
Leicester Massachusetts
Lenox Massachusetts
Leominster Massachusetts
Leverett Massachusetts
Lexington Massachusetts
Leyden Massachusetts
Lincoln Massachusetts
Littleton Massachusetts
Longmeadow Massachusetts
Lowell Massachusetts
Ludlow Massachusetts
Lunenburg Massachusetts
Lynn Massachusetts
Lynnfield
Malden Massachusetts
Manchester-by-the-Sea Massachusetts
Mansfield Massachusetts
Marblehead Massachusetts
Marion Massachusetts
Marlborough Massachusetts
Marshfield Massachusetts
Mashpee Massachusetts
Mattapoisett Massachusetts
Maynard Massachusetts
Medfield Massachusetts
Medford Massachusetts
Medway Massachusetts
Melrose Massachusetts
Mendon Massachusetts
Merrimac Massachusetts
Methuen Massachusetts
Middleborough Massachusetts
Middlefield Massachusetts
Middleton Massachusetts
Milford Massachusetts
Millbury Massachusetts
Millis Massachusetts
Millville Massachusetts
Milton Massachusetts
Monroe Massachusetts
Monson Massachusetts
Montague Massachusetts
Monterey Massachusetts
Montgomery Massachusetts
Mount Washington
Nahant Massachusetts
Nantucket Massachusetts
Natick Massachusetts
Needham Massachusetts
New Ashford Massachusetts
New Bedford Massachusetts
New Braintree Massachusetts
New Marlborough Massachusetts
New Salem Massachusetts
Newbury Massachusetts
Newburyport Massachusetts
Newton Massachusetts
Norfolk Massachusetts
North Adams Massachusetts
North Andover Massachusetts
North Attleborough Massachusetts
North Brookfield Massachusetts
North Reading Massachusetts
Northampton Massachusetts
Northborough Massachusetts
Northbridge Massachusetts
Northfield Massachusetts
Norton Massachusetts
Norwell Massachusetts
Norwood
Oak Bluffs Massachusetts
Oakham Massachusetts
Orange Massachusetts
Orleans Massachusetts
Otis Massachusetts
Oxford
Palmer Massachusetts
Paxton Massachusetts
Peabody Massachusetts
Pelham Massachusetts
Pembroke Massachusetts
Pepperell Massachusetts
Peru Massachusetts
Petersham Massachusetts
Phillipston Massachusetts
Pittsfield Massachusetts
Plainfield Massachusetts
Plainville Massachusetts
Plymouth Massachusetts
Plympton Massachusetts
Princeton Massachusetts
Provincetown
Quincy
Randolph Massachusetts
Raynham Massachusetts
Reading Massachusetts
Rehoboth Massachusetts
Revere Massachusetts
Richmond Massachusetts
Rochester Massachusetts
Rockland Massachusetts
Rockport Massachusetts
Rowe Massachusetts
Rowley Massachusetts
Royalston Massachusetts
Russell Massachusetts
Rutland
Salem Massachusetts
Salisbury Massachusetts
Sandisfield Massachusetts
Sandwich Massachusetts
Saugus Massachusetts
Savoy Massachusetts
Scituate Massachusetts
Seekonk Massachusetts
Sharon Massachusetts
Sheffield Massachusetts
Shelburne Massachusetts
Sherborn Massachusetts
Shirley Massachusetts
Shrewsbury Massachusetts
Shutesbury Massachusetts
Somerset Massachusetts
Somerville Massachusetts
South Hadley Massachusetts
Southampton Massachusetts
Southborough Massachusetts
Southbridge Massachusetts
Southwick Massachusetts
Spencer Massachusetts
Springfield Massachusetts
Sterling Massachusetts
Stockbridge Massachusetts
Stoneham Massachusetts
Stoughton Massachusetts
Stow Massachusetts
Sturbridge Massachusetts
Sudbury Massachusetts
Sunderland Massachusetts
Sutton Massachusetts
Swampscott Massachusetts
Swansea
Taunton Massachusetts
Templeton Massachusetts
Tewksbury Massachusetts
Tisbury Massachusetts
Tolland Massachusetts
Topsfield Massachusetts
Townsend Massachusetts
Truro Massachusetts
Tyngsborough Massachusetts
Tyringham
Upton Massachusetts
Uxbridge
Wakefield Massachusetts
Wales Massachusetts
Walpole Massachusetts
Waltham Massachusetts
Ware Massachusetts
Wareham Massachusetts
Warren Massachusetts
Warwick Massachusetts
Washington Massachusetts
Watertown Massachusetts
Wayland Massachusetts
Webster Massachusetts
Wellesley Massachusetts
Wellfleet Massachusetts
Wendell Massachusetts
Wenham Massachusetts
West Boylston Massachusetts
West Bridgewater Massachusetts
West Brookfield Massachusetts
West Newbury Massachusetts
West Springfield Massachusetts
West Stockbridge Massachusetts
West Tisbury Massachusetts
Westborough Massachusetts
Westfield Massachusetts
Westford Massachusetts
Westhampton Massachusetts
Westminster Massachusetts
Weston Massachusetts
Westport Massachusetts
Westwood Massachusetts
Weymouth Massachusetts
Whately Massachusetts
Whitman Massachusetts
Wilbraham Massachusetts
Williamsburg Massachusetts
Williamstown Massachusetts
Wilmington Massachusetts
Winchendon Massachusetts
Winchester Massachusetts
Windsor Massachusetts
Winthrop Massachusetts
Woburn Massachusetts
Worcester Massachusetts
Worthington Massachusetts
Wrentham
Contact a financial advisor in
Massachusetts for more Information
