Take Charge of Your 401K – Part 1
HAVE YOU EVER SWITCHED JOBS?
Research shows that the average American employee switches jobs over 12 times by the time they turn 54.
Changing jobs can mean that many Americans have old 401(k) plans, which may not be properly positioned to help them prepare for retirement. Every time you change jobs, you have some choices to make about your old 401(k).
Generally, there are four basic choices:
• You can leave the assets in your former employer’s plan, if permitted.
• You can roll over the assets into your new employer’s plan, if the plan accepts transfers.
• You can roll the assets over into an Individual Retirement Account (IRA).
• You can take the cash value of your account (and manage the potential tax consequences).
Each of these choices has advantages and disadvantages to consider. In this special report, we’ll show you how to avoid common (and expensive) mistakes and how your 401(k) can play a key role in your retirement preparations. Remember, you have at least 30 days to decide what to do with your 401(k) when you switch jobs.1 In most circumstances, you must begin taking required minimum distributions from your 401(k) in the year you turn 73. Withdrawals from your 401(k) or other de”ned contribution plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.
Staying Put
If you are happy with your former employer’s plan, you might consider leaving your account behind. It’s important to remember that you don’t give up the right to move your account to your new employer’s 401(k) or an IRA at any time. !ere may be restrictions on your money, however. For example, you may not be able to take a loan from the plan. Also, some employers may charge higher fees if you are not an active employee.
Stay tuned for part 2 where we discuss taking your plan to your new job.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.
