Have you been considering a 401k rollover? You have several options when you leave an old employer, whether you are leaving to take another job, or to retire. You can leave your money in the old plan if they allow it, or you can roll the money over into your own IRA (individual retirement account) that you control. Of course, you can take the money out, but if you are withdrawing money from a traditional 401k and you are under age 59-1/2, there will be a 10% IRS penalty, plus you will owe income taxes on the entire amount.
Keep in mind that if you are directing that your 401k be rolled over to you personally, called an “indirect rollover,” the 401k plan administrator will have to withhold 20% for federal income taxes. (This must be reconciled on your tax returns.) Instead, we can help you execute a direct rollover, from institution to institution, so this 20% withholding won’t apply. When you roll over your old retirement account into an IRA, you can preserve the tax-deferred status of your retirement assets without paying current taxes or early withdrawal penalties at the time of transfer.
