Quiz: Should you consider a direct 401k Rollover to a Rollover IRA?

Rolling a retirement plan into an IRA can yield a number of benefits for investors who are leaving their jobs or retiring. Whether you are looking for estate planning flexibility, expanded investment choices, or more control over your required minimum distributions, if you identify with even one of the following statements, a Rollover IRA may be just what you are looking for.

@ I want more investment choices in my retirement plan.
@ I want to pass money on to my heirs.
@ I have retirement accounts in more than one place.
@ I'm thinking about retiring before age 55, and I may need to tap my retirement savings.
@ I want to control the amount of income I get from my retirement plan each year.
@ I want to decide which investments to draw from for my required minimum distributions.
@ I want to prolong the tax-deferral of my retirement plan for my heirs.
@ I want less paperwork associated with my retirement plans.

 

If you are under age 59 ½, a 10% premature penalty may be assessed on all distributions you receive. Waiver of the 10% premature penalty may apply in some specific circumstances. Employees should consult their tax advisor pertaining to their particular situation.

By taking substantially equal periodic payments, you avoid incurring the 10% premature distribution penalty. The substantially equal distribution schedule selected must continue for at least 5-years or until you reach age 59 ½, whichever is longer, or you will be subject to a 10% premature distribution penalty on all payouts already received. Further details with respect to substantially equal periodic payment formulas are provided in IRS Notice 89-25.

All distributions from your retirement account are taxable in the year received. Please note, that at age 70 ½, you must begin taking minimum distributions from your retirement plan.

Distributions for any of the above reasons involve specific tax regulations and options. Please consult your tax advisor before requesting the distribution. This information does not constitute tax advice. FSC Securities Corporation and/or its representatives do not provide tax advice. Please consult your tax advisor pertaining to your particular situation.

Information and opinions expressed are strictly those of the author and may not be those of FSC Securities Corporation.