Retirement Rollovers

Written by Jacey Harmon
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Retirement rollovers affect millions of Americans every year. Changing jobs is one of the main reasons why people experience retirement rollovers. Some may think that retirement rollovers are frustrating and confusing, but they don't have to be. Once you know your options, retirement rollovers are rather painless.

Options Involved with Retirement Rollovers

If your retirement rollover occurs due to changing jobs, one of your options is to keep your current plan. This may be an acceptable option for some people, if you don't mind having several different accounts, that is. You can also transfer funds into your new employer's retirement plan. This is an acceptable option, but I would recommend looking into the investments available through the new plan. Most employer plans have only 15 different funds to choose from while an independent financial advisor may have access to thousands of different funds.

IRAs are a great option for individuals. You may request a cash settlement from your previous employer and deposit the funds into a traditional IRA. As long as you can deposit the cash in the new IRA within 60 days there will be no penalties. Transferring your previous employer's plan into a Roth IRA may involve penalties and taxes. Talk with a financial consultant before considering that plan. You may also transfer funds directly into a new IRA account.

Cashing out your retirement plan, though it is an option, is not recommended. Not only would it have tax implications, but would also put a serious dent into your retirement planning. Once you know the options involved with retirement rollovers the next step is as simple as opening an account with a financial advisor.


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