401K Rollovers

Top 10 Reasons Why You Might Want to Roll Your Retirement Plan Assets into an IRA

1. More investment choices- An IRA owner is not limited to the investments chosen by a plan administrator, therefore there is generally a wider range of funding options in an IRA than those currently available in your employer's plan.

2. Opportunity to manage your own investments- An IRA can give you more control over your own investments and freedom to to manage them. Your can use a money manager or choose to manage the money yourself in a self-directed brokerage account.

3. Ability to easily name non-spouse beneficiaries- You may need the flexibility of naming a non-spouse beneficiary to your assets, whether you are married or not. Or, you may want to add a contingent beneficiary in addition to your spouse, which makes it easier to transfer assets upon death.

4. Ability to "Stretch" out benefits after death- This concept helps beneficiaries continue a deceased owner's IRA for as long as possible, extending the period for tax-deferred growth while taking the minimum yearly amount as required by law.

5. Roth conversion privilege- If it makes sense for you to pay the taxes due on the plan assets now in order to take advantage of income tax-free distributions later, a Roth conversion is an option. A Roth conversion is not right for everyone.

6. Consolidate assets- As a result of multiple job changes, you might find yourself with money scattered among several retirement plans. Instead, you can take the qualified assets and combine them into a single account.

7. No 10% early withdrawal penalty for qualified first-time home buyers purchase or for qualified higher education expenses- There are several exceptions to the pre-age 59 1/2 early withdrawal tax penalty which are available with IRAs but not with qualified plans.

8. Ability to add "catch-up" contributions- Employed individuals age 50 and over can add additional "catch-up" contributions to IRAs and certain qualified employer plans. This is not available with qualified employer plans once you've left employment.

9. You can roll the assets to another employer plan later- Portability provisions from the Economic Growth and Tax Relief Reconciliation Act have expanded opportunities for you to move assets between various types of retirement plans. You should discuss this with your tax advisor

10. Easy access to assets- Access to employer plan assets may be limited and interim distributions may not be possible until you reach early or normal retirement age. With IRAs, money can be accessed at any time (Federal, state and local income tax penalties may apply).

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