FAQ's Regarding 401k Rollovers

 

Two Categories

  •  Changing Jobs FAQ

  •  Retirement FAQ

 

 

1. Changing Jobs FAQ's

 

•  I will be changing jobs soon. What are my options for the money in my account?

 

One of the reasons why company retirement plans are so popular is because they are portable: generally speaking, you can take your vested account balance with you. If you decide to change jobs, you generally have four options for your retirement plan:

  1. Leave your savings in your former employer's retirement savings plan.
  2. Directly roll over all or a portion of the account to your new employer's retirement plan (if the new employer offers this option).
  3. Roll the money to an IRA Rollover. This is typically the best route. An IRA Rollover account opens up your retirement plan to a slew of new investment options. As well, the money remains tax deferred.
  4. Take a full or partial withdrawal in cash. This is typically a bad way to go as you're opening yourself up to a significant tax burden with taxes due and penalties.

 

•  What happens to my 401K loan if I leave my employer?

 

If you have an outstanding balance on your loan and do not make arrangements to pay it back when you terminate employment, your loan will be considered in default and the outstanding balance would be treated as a taxable withdrawal. The provisions of your plan will outline the circumstances under which default occurs. Please refer to the Plan's Summary Plan Description for additional information.

 

•  Can I simply leave my investments in the plan?

 

The easy answer is yes. In most cases, your former employer will allow you to leave the funds in the plan. However, if you roll the account to a Rollover IRA with Delta Capital Management, you have more flexibility. Our IRA's will give you thousands of choices for your retirement assets from mutual funds to stocks to fixed income alternatives. As well, you will have a Registered Investment Advisor at your disposal for consultation.

 

•  If I'm laid off or fired, what happens to my money?

 

In most cases, if you're laid off or fired you have the same options for your money as when you leave your job for any other reason. You may be able to leave your money in the plan, roll your money over into an IRA or another employer's qualified plan, or have the money distributed to you. You will owe applicable income taxes and penalties when you withdraw the money, unless you roll it over to another employer's qualified plan or an IRA.

 

•  Can I rollover my retirement savings plan balance into a Delta Capital Management IRA?

 

Yes, if you are changing jobs or nearing retirement and would like information about Delta Capital Management's IRA Rollover, simply call Sean Casterline at 800-333-3700. We will be happy to review your current situation and make recommendations for you.

 

 

 

2. Retirement FAQ's

 

•  I will be retiring soon. What are my options for the money in my account?

 

Company retirement plans are portable: generally speaking, you can take your vested account balance with you when you retire from the company. Upon retirement, you generally have three options for your retirement plan:

 

•  Leave your savings in your former employer's retirement savings plan – This is typically a bad idea as you need more flexibility and investment options upon retirement. Your financial picture has changed and typically corporate plans are very rigid as it applies to what you can invest in.

•  Roll the money to an IRA Rollover. This is typically the best route. An IRA Rollover account opens up your dollars to a slew of new investment options. As well, the money remains tax deferred. Specifically, the Delta Capital Management IRA Rollover will give you thousands of choices for your retirement assets from mutual funds to stocks to fixed income alternatives. As well, you will have a Registered Investment Advisor at your disposal for consultation.

•  Take a full or partial withdrawal in cash. This is typically a bad way to go as you're opening yourself up to a significant tax burden with taxes due and penalties.

 

•  What happens to my 401K loan when I retire?

 

If you have an outstanding balance on your loan and do not make arrangements to pay it back when you retire, your loan will be considered in default and the outstanding balance would be treated as a taxable withdrawal. The provisions of your plan will outline the circumstances under which default occurs. Please refer to the Plan's Summary Plan Description for additional information.

 

•  Can I simply leave my investments in the plan?

 

The easy answer is yes. In most cases, your former employer will allow you to leave the funds in the plan. However, if you roll the account to a Rollover IRA with Delta Capital Management, you have more flexibility. Our IRA's will give you thousands of choices for your retirement assets from mutual funds to stocks to fixed income alternatives. As well, you will have a Registered Investment Advisor at your disposal for consultation.

 

•  Can I rollover my retirement savings plan balance into a Delta Capital Management IRA?

 

Yes, if you are changing jobs or nearing retirement and would like information about Delta Capital Management's IRA Rollover, simply call Sean Casterline at 800-333-3700. We will be happy to review your current situation and make recommendations for you.