Should You Rollover Your Retirement Savings Account?
As the baby boomer generation progresses to retirement, the importance of retirement savings rollovers has increased. There have been reports that 'baby boomers' are not prepared for their retirement. However, many people believe the truth is much better than has been reported.
A report released by a leading financial consulting firm showed that about six of 10 people are managing their retirement savings and preparing adequately. The report also found that 20% should change their plan modestly and an additional 20% were at high risk for retirement failure. Some of the misconception about the unpreparedness of the baby boomer generation for retirement has arisen from the frequent rollover of retirement plans from the small business 401k plan providers.
In past generations, retirement plans were easily traceable. The mere existence of a retirement plan implied a long-term commitment to a single employer. The same is not true with 'baby boomers'. Most in this generation have had multiple employers and maintained their retirement fund through more fluid avenues. To address the different needs created by this generation, there are now a myriad of options that cater to the needs of those reinvesting there retirement savings. Individual retirement accounts have become the main venue of reinvestment.
Rolling Over Your Retirement Savings
There are many factors to consider during a rollover. The following information addresses 2 basic questions concerning the most popular rollover choices for individual retirement accounts.
Individual retirement account scan overcome the 20% taxation loss. There can be a tax fee of 20%, stated as a 'withholding fee' that applies if you do not arrange for a 'direct rollover'. An individual retirement account rollover strategy will allows you to avoid the 20% loss. Any check that is distributed from the previous account should be made out directly to a trustee of the new account to avoid the fee. Typically, your name should only appear on the check as a reference. Direct rollovers will require that you inform the previous 3(38) fiduciary plan manager of your transition within 60 days of your official departure.
Individual retirement plans are not beneficial if your retirement is wrapped up in stocks or other ventures. In such a case, it will be prudent to withdraw the shares and depositing them in a taxable account rather than of rolling them over into your account. This is especially true if it is received as a lump sum distribution. The benefits may far outweigh the 20% fund taxation depending on your situation.
The above is an overview that will help you understand whether to rollover your retirement savings. Should you wish to learn more, visit https://www.youtube.com/watch?v=2tfB-SSYL1A.
