Americans born between 1957 and 1964 held an average of 11 jobs between the ages of 18 and 44.* As people in this group approach retirement, they could potentially have upwards of 11 different employer-sponsored retirement plan accounts to keep track of and manage.
Even if you have only a couple of accounts in former employers' retirement plans, now may be the time for you to consolidate them into one individual retirement arrangement (IRA) — for several good reasons.
Advantages of consolidating
Rolling over assets from multiple retirement plan accounts to an IRA helps maintain tax benefits while consolidating the accounts into one, easy-to-monitor account.
Also, having your retirement assets in one IRA can simplify the process of periodically rebalancing your investment mix to reflect the asset allocation** you have worked out with your financial professional. You can view all your retirement assets in one account, rather than as several accounts that have to be considered together but rebalanced separately.
Direct rollover is best
The most tax-effective way to move your employer retirement plan assets to an IRA is to have the retirement plan transfer them directly to the custodian of the IRA. That way, you won't have to worry about tax withholding and can keep all your assets tax deferred. (You can have money that's in a designated Roth 401(k), Roth 403(b) or Roth 457(b) account transferred to a Roth IRA.)
You can also transfer assets from a pretax plan account to a Roth IRA, but you'll have to pay current income tax on the taxable portion of the transfer. See "Would a Roth Conversion Work for You?" on the back page for more details.
Before consolidating your retirement plan accounts, touch base with your financial professional and tax advisor to compare the costs of the current plan, the rollover (if any) and the new IRA to help ensure you receive the maximum benefits of such a move.
* U.S. Bureau of Labor Statistics News Release, September 10, 2010
** Asset allocation does not guarantee a profit or protect against losses.
FINRA Reference #FR2012-1030-0152/E 02/04/13
Even if you have only a couple of accounts in former employers' retirement plans, now may be the time for you to consolidate them into one individual retirement arrangement (IRA) — for several good reasons.
Advantages of consolidating
Rolling over assets from multiple retirement plan accounts to an IRA helps maintain tax benefits while consolidating the accounts into one, easy-to-monitor account.
Also, having your retirement assets in one IRA can simplify the process of periodically rebalancing your investment mix to reflect the asset allocation** you have worked out with your financial professional. You can view all your retirement assets in one account, rather than as several accounts that have to be considered together but rebalanced separately.
Direct rollover is best
The most tax-effective way to move your employer retirement plan assets to an IRA is to have the retirement plan transfer them directly to the custodian of the IRA. That way, you won't have to worry about tax withholding and can keep all your assets tax deferred. (You can have money that's in a designated Roth 401(k), Roth 403(b) or Roth 457(b) account transferred to a Roth IRA.)
You can also transfer assets from a pretax plan account to a Roth IRA, but you'll have to pay current income tax on the taxable portion of the transfer. See "Would a Roth Conversion Work for You?" on the back page for more details.
Before consolidating your retirement plan accounts, touch base with your financial professional and tax advisor to compare the costs of the current plan, the rollover (if any) and the new IRA to help ensure you receive the maximum benefits of such a move.
* U.S. Bureau of Labor Statistics News Release, September 10, 2010
** Asset allocation does not guarantee a profit or protect against losses.
FINRA Reference #FR2012-1030-0152/E 02/04/13
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This is an advertisement prepared by LTM Publishing, Inc. for the use of the sender. Articles are not written or produced by the named representative. The advertisement provided is not intended as legal or tax advice and may not be relied on for purposes of avoiding federal tax penalties. All individuals, including those involved in the estate planning process, are advised to meet with their tax and legal professionals. The individual sponsoring this newsletter will work with your tax and legal advisors to help select appropriate product solutions. We do not endorse or guarantee the content or services of any website mentioned in this newsletter. We encourage you to review the privacy policy of each website you visit. Limitations, restrictions and other rules and regulations apply to many of the financial and insurance products and concepts presented in this newsletter, and they may differ according to individual situations. The publisher does not assume liability for financial decisions based on the newsletter's contents. Great care has been taken to ensure the accuracy of the newsletter copy at press time; however, markets and tax information can change suddenly. Whole or partial reproduction of Let's Talk Money® without the written permission of the publisher is forbidden. ©LTM Publishing, Inc., 2013.
We Value Your Input... Your feedback is very important to us. If you have any questions about any of the subjects covered here, or suggestions for future issues, please don't hesitate to call. It's always a pleasure to hear from you.
This is an advertisement prepared by LTM Publishing, Inc. for the use of the sender. Articles are not written or produced by the named representative. The advertisement provided is not intended as legal or tax advice and may not be relied on for purposes of avoiding federal tax penalties. All individuals, including those involved in the estate planning process, are advised to meet with their tax and legal professionals. The individual sponsoring this newsletter will work with your tax and legal advisors to help select appropriate product solutions. We do not endorse or guarantee the content or services of any website mentioned in this newsletter. We encourage you to review the privacy policy of each website you visit. Limitations, restrictions and other rules and regulations apply to many of the financial and insurance products and concepts presented in this newsletter, and they may differ according to individual situations. The publisher does not assume liability for financial decisions based on the newsletter's contents. Great care has been taken to ensure the accuracy of the newsletter copy at press time; however, markets and tax information can change suddenly. Whole or partial reproduction of Let's Talk Money® without the written permission of the publisher is forbidden. ©LTM Publishing, Inc., 2013.
We Value Your Input... Your feedback is very important to us. If you have any questions about any of the subjects covered here, or suggestions for future issues, please don't hesitate to call. It's always a pleasure to hear from you.
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