Rollovers in Frisco TX: Should You Stay or Should You Roll?

Rollovers in Frisco TX: Should You Stay or Should You Roll?

Roll Overs Frisco TXWhen people move on to work at different companies, rollovers in Frisco TX are typically the way employees take control of retirement funds that have accumulated. According to BankRate, direct IRA rollovers go straight from a 401(k) or similar employer-sponsored retirement plan into an IRA account without withdrawing the funds in the traditional manner. That can save you the early withdrawal penalty, and it will put your nest egg into an account for which you call the investment shots, but rollovers for employees aren’t a one-size-fits-all solution. There are instances when it’s better to leave your money where it is.

Early Retirement

If your 401(k) is a company plan, you may want to leave those retirement funds where they are as a type of unemployment/early retirement insurance fund. BankRate explains that if you’re laid off or retire early when you’re 55 or older, you can withdraw from a company 401(k) without being penalized.

No Free Lunch–or Fees

The Financial Industry Regulatory Authority warns investors that some financial institutions lure people in with claims of free rollovers, but that there are always some fees involved in investment accounts to cover managing investments and account administration. What’s more, your individual account may not have as much buying power as your previous employer’s 401(k) account because it’s unlikely that your IRA balance won’t be big enough to meet the minimum for institutional funds. You investing on your own versus leaving your retirement account in your previous employer’s fund is essentially similar to the difference between buying retail versus buying wholesale.

Leave a Little Here, Put Some Over There

Sometimes there is the option to leave part of your retirement savings in your previous employer’s plan, and transfer the rest to an IRA. Check with the benefits office to find out if you have that choice, and to also find out how long you have to make a definitive decision. You don’t necessarily need to know what you’re going to do with the money in your 401(k) on the day you leave the company, but there may be a limit on the amount of time you have to decide. If you choose to roll the funds over, know where you’re going to put the money before you initiate the transaction so you can request a direct rollover. With indirect rollovers, the government assumes you won’t complete the rollover within the allotted 60 days, so 20 percent is typically withheld to cover the taxes and penalties that will be due when you miss the deadline.

When weighing the pros and cons of rollovers, Frisco TX investors count on Jason Graziani to help them understand their options. An expert in financial services, Jason can help you sort through the choices you have so you can make well-informed decisions. Call Jason Graziani today at 972-992-1920.

Roll Overs Frisco TX
Jason Graziani
15150 Preston Road, Suite 300
Dallas, Texas 75248
(972) 992-1920

Photo Credit: @ jmetzger631