Getting The Most From Your Retirement Plan

Winter, 2009

Are your retirement assets still invested with a previous employer?

For the individual who answers yes to this question, the reason could be that you don’t realize you have other choices, or maybe you just don’t know what to do with your assets.  Because your retirement assets may very well be one of your largest assets, your investment choices could mean the difference between retiring comfortably while maintaining a sufficient standard of living or the alternative.

·        Would you like to choose how your assets are invested?

·        Would you like your assets to be more diversified?

·        Do you feel your investment returns could be higher?

·        Would you like to consolidate your investments?

Again, for the individual who answers yes to these questions, you should think about a rollover individual retirement account.  This type of account gives you the ability to manage your investments, on your own, or with the help of a financial planner or an investment advisor that you choose.  Simply stated, a rollover allows you to transfer funds between qualified accounts.

There are different methods available to facilitate this transaction.  You can use the preferred trustee-to-trustee transfer, which is a tax-free rollover that can be completed with no taxes withheld.  Or, you can receive the funds directly.  However, if you receive the funds directly from the plan, federal taxes may be required to be withheld from the distribution.

Also, when receiving the funds directly, in order for the entire rollover to be tax-free, you must reinvest the entire distribution within 60 days.  This means you will have to make up what was withheld for taxes from another source.  If you only reinvest the net amount received, you will be responsible for taxes on the difference and possibly be subject to an early distribution penalty. 

What choices do I have with my present employer?

Even though your retirement choices are limited while you are employed, that does not mean you should do nothing.  You still have choices within the fund families your employer has selected.  Your investments should be reviewed on a regular basis and changes made as needed.

I don’t know what to do?

It is recommended that you seek tax and financial advice from someone you feel comfortable working with.  We can provide both services and would welcome the opportunity to work with you.