IRA Rollovers

When it comes to a retirement plan with a previous employer, most financial experts agree don’t leave it behind. Why roll retirement accounts? Several reasons…

  1. After changing jobs, most people tend to lose touch with the plan and neglect it.
  2. When you roll your retirement plan over, you have a much greater menu of investment options available, as you are not confined to the limited choices at your previous company.
  3. Frequently, there are ongoing fees with a 401K plan that can often be reduced or eliminated when you roll it over. Rolling is a tax-free and cost-free event.
  4. Perhaps most important for estate planning purposes, with a 401K plan or a 403B plan, your heirs (if other than your spouse) may not be able “stretch” the plan. Your spouse can, but non-spouses cannot unless specified and there may be contingencies. What this means is that your life savings may be taxed as a lump sum. The probabilities are that when you pass, your children or your heirs will be in their peak earning years and in a significantly higher tax bracket.  This extra money is dropped on them all at once, and they will pay the maximum tax, which will decimate as much as half of the life savings you intended for them.

Contact us today to learn more.