1035 Exchanges


Congratulations you have a new job! You've just retired! In either case you have to decide what you want to do with the assets you have accumulated in your retirement plan.

Leaving it where it is?
Sometimes your former employer may allow you to leave the assets you have accumulated within your current plan. However you may have greater investment options and greater flexibility in withdrawing your funds by rolling over your assets into your own IRA.

Transferring it to your new employer?
Your new employer allows you to rollover your assets from you former employer to your new employer's retirement plan. A good choice? Again your investment options are limited to the choices that are available within your new employers plan.

Some plans may also impose a "waiting period" before you can rollover your money from your former employer.

Taking your money in cash?
Most often this is least desirable option. If your former employer sends you a check they are required to withhold 20% for federal taxes. In addition if you do not deposit balance in another retirement plan or IRA within 60 days, the entire amount becomes taxable. If your under age 59 1/2 you may be subject to an additional penalty of 10%.


Separate IRA for Rollovers

Most often opening an IRA just for money that will be rolled over from one or more retirement plans is usually the best solution. The advantages of opening an IRA just for rollovers;

You can transfer these funds back into an employer sponsored retirement plan if you decide to.

You have the option of placing these funds in a wide variety of investment options including, mutual funds, variable annuities, annuities and self directed IRA's.

The ease of calculating the minimum required distributions amount based on one account verses several accounts. Many times the institution that you opened your IRA will assist you in calculating the minimum distribution amount.



Copyright 1999 - 2003, Annuity RateWatch.com, Inc.
Fixed Annuity Data provided by Annuity RateWatch.com, Inc.    Distributed by Virtual Annuity Brokers, Inc.