Rollovers

I hope you’re doing well and that you’re on track with your goals! This month we’re going to talk about 5 ways to help protect and grow your retirement savings.

  1. If I leave an employer, should my retirement money go with me? In most cases, yes. The primary reasons are that once you separate from that employer, you can no longer contribute to that account. Also, if you were receiving any company matching contributions, they typically stop once you’re no longer working there.
  2. What options are available? Any time you leave an employer, you always have 4 options. 1) Leave the money with your previous employer. 2) Initiate a rollover of funds to your new employer’s retirement plan. 3) Initiate a rollover to a Traditional or Roth IRA. 4) Cash out what you’ve saved.
  3. What is a rollover, and will I get taxed? The word “rollover” refers to the fact that money is in motion. You’re moving it from one place or plan to another. There are specific rules and guidelines that need to be met so you avoid a tax penalty. For example, money coming from an employer plan is usually pre-tax. Because of that, any account you decide to roll it to needs to be pre-tax, so it doesn’t cause a taxable event.
  4. What is an IRA? IRA is short for “Individual Retirement Account” and what it does is allows you to consolidate your money into one central location if you’re rolling it over from one or more employer plan. It also allows you to start saving and investing independently, without the use of an employer, if you’re self-employed for example. There are two primary types of IRA’s and they’re called Traditional and Roth IRA’s.
  5. What’s the difference between a Traditional and a Roth IRA? The main difference between the two is that the Traditional IRA is designed for pre-tax money and the Roth IRA is designed for after-tax money. Also, money withdrawn from a Traditional IRA is taxable and money withdrawn from a Roth IRA is not, if the account is 5 years or older.

Would you like to schedule some time to put together a personalized plan? Contact me at seguewmconsulting@gmail.com


Disclosure

As a consulting firm, the information we share with our clients is just that, information. We do not require any of our clients to follow what we recommend, nor do we have any alliances or affiliations with any outside broker dealers, firms, insurance companies, or third parties.

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