Atlantic County Woman - 2015 November / December by The County Woman

Financial Management Financial Management

Changing Jobs? Take Your 401(k) And ... Roll It! If you’ve lost your job, or are changing jobs, you may be wondering what to do with your 401(k) plan account. It’s important to understand your options. Don’t Spend It, Roll It! While this pool of dollars may look attractive, don’t spend it unless you absolutely need to. If you take a distribution you’ll be taxed, at ordinary income tax rates, on the entire value of your account except for any after-tax or Roth 401(k) contributions you’ve made. And, if you’re not yet age 55, an additional 10% penalty may apply to the taxable portion of your payout. (Special rules may apply if you receive a lump-sum distribution and you were born before 1936, or if the lump-sum includes employer stock.) If your vested balance is more than $5,000, you can leave your money in your employer’s plan until you reach normal retirement age. But your employer must also allow you to make a direct rollover to an IRA or to another employer’s 401(k) plan. As the name suggests, in a direct rollover the money passes directly from your 401(k) plan account to the IRA or other plan. This is preferable to a “60-day rollover,” where you get the check and then roll the money over yourself, because your employer has to withhold 20% of the taxable portion of a 60-day rollover. You can still roll over the entire amount of your distribution, but you’ll need to come up with the 20% that’s been withheld until you recapture that amount when you file your income tax return.

Should I Roll Over To An IRA? You need to weigh all of the factors, and make a decision based on your own needs and priorities. It’s best to have a professional assist you with this, since the decision you make may have significant consequences--both now and in the future.

ing your paperwork, opening an IRA account, transferring your funds, and selecting investments. And if your rollover involves more complex issues such as special tax treatment of company stock through Net Unrealized Appreciation (NUA), Required Minimum Distributions (RMDs) upon reaching age 70 ½, or Inherited (Stretch) IRAs, your Financial Advisor has the expertise to help you.

Call Janney Montgomery Scott at 609-601-2509 or 1-800-346-1446. Tracy Fiedler-Santoro, First Vice President/Wealth Management of Marchel Wealth Management Group at Janney Montgomery Scott LLC. Tracy offers personalized retirement and wealth management solutions to individuals, families and organizations. She takes a holistic approach, getting to know her clients and then helping them define and prioritize their goals. She has been with Janney Montgomery Scott LLC, a leading full-service wealth management, financial services and investment banking firm, since 2008. Her areas of expertise include financial, retirement, estate, insurance and education planning, as well as mutual funds, equities, annuities, and trust services. Tracy also specializes in investment strategies designed specifically for women.

Take Control of your Retirement

Reasons To Roll Over To An IRA:

• You generally have more investment choices with an IRA. You typically may freely move your money around to the various investments offered by your IRA trustee, and you may divide up your balance among as many of those investments as you want. • You can freely allocate your IRA dollars among different IRA trustees/custodians. There’s no limit on how many direct, trustee-to-trustee IRA transfers you can do in a year. This gives you flexibility to change trustees often if you are dissatisfied with investment performance or customer service. It can also allow you to have IRA accounts with more than one institution for added diversification. • An IRA may give you more flexibility with distributions. Your distribution options in a 401(k) plan depend on the terms of that particular plan, and your options may be limited. However, with an IRA, the timing and amount of distributions is generally at your discretion (until you reach age 70½ and must start taking required minimum distributions in the case of a traditional IRA). • You can roll over (essentially “convert”) your 401(k) plan distribution to a Roth IRA. You’ll have to pay taxes on the amount you roll over (minus any after-tax contributions you’ve made), but any qualified distributions from the Roth IRA in the future will be tax free. Understanding your complete financial picture is an important step in planning your retirement. Old 401(k)’s and other retirement accounts left behind at previous employers can make your investments difficult to manage. Many advantages of these plans, including loans and matching contributions, are lost when you leave your employer. An IRA rollover can offer you more investment options, flexibility, and control of your retirement assets. Your Financial Advisor can help you understand and if appropriate, consolidate your accounts to simplify your investments. Your Financial Advisor will make the process of rolling over assets to an IRA convenient for you. Your advisor will assist you in evaluating your rollover options, complet-

The Janney Rollover IRA Advantage

Do you have a 401(k), or other employer-sponsored plan, from an old employer that needs attention? Rolling over your assets to an IRA with Janney can be a smart move. You’ll receive: • Expert rollover advice and support. • Help with the paperwork and transfer of funds. • A comprehensive choice of investment options. • More control over your retirement assets, fees, and costs. Let us make the rollover process simple and easy for you—every step of the way. Please call our office to set up an appointment.

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10/10/2013 3:54:32 PM

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