Changing Jobs (Part 3 of 3) Retirement Plan Options
Maintain Stability in the Midst of Change
Life can bring a flood of changes during your working years.
Career changes. Changes in priorities. Changes from work to
retirement. How can you make sure that your investments will
navigate through these periods of change?
Retirement Plan Options
One of the toughest challenges we face is building and
maintaining a retirement account that will help us to meet our
financial goals. The money you save for retirement has a certain
amount of protection--when your financial situation changes, you
can continue to protect your investment by "rolling over" your
qualified retirement plan into an Individual Retirement Account
(IRA). It is critically important to learn how you can guard
your money against penalties, taxes, and other implications
associated with income and employment changes.
The Four Basic Options: 1. Take it out for immediate use 2.
Leave it in your current employer's retirement plan 3. Move it
to your new employer's retirement plan 4. Roll it over.
Let's take a closer look at these four options.
Option 1: Take it out for immediate use. If you've
participated in a retirement plan for a while, you may be
surprised at the amount you've saved. You may be tempted to
spend it to pay down a debt or make a signification purchase.
There are serious consequences for your money:
Pros: * Money is immediately available
Cons: * Pay federal income tax and possibly state and local
taxes * If you are under 59