Different options to consider for your retirement plan distribution.
401K, IRA, CD exchange, Mutual Fund / IRA transfer..
Option 1: Lump Sum Distribution
Most tempting option, receive a lump sum of the savings you have built up.
There may be a cost for this option.
Loss of Tax Deferral status.
20% mandatory federal income tax withholding.
Depending on your age, a possible 10% early distribution penalty (if under age 59)
Option 2: Leave your savings with your employer sponsored plan:
By simply leave your savings "as is" with your former company you are giving up control and flexibility of YOUR savings.
Most company sponsored plans have guidelines to access YOUR money.
20% mandatory withholding to distribute funds from a company sponsored plan.
Option 3: ROLLOVER of your savings into your personal IRA:
Continued tax deferred status.
You control your IRA, more flexible options with investment options.
Can incorporate GUARANTEES to your IRA.
NO mandatory 20% federal withholding.
Rollovers can be done between financial institutions,
easiest way to roll your savings over.
You can also request a check issued by your current employer in the amount of you account value, made out to your IRA
You then have 60 days to deposit it into your IRA.
This is the fastest way to complete the rollover.
NO TAX IMPLICATIONS.
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