Retirement Account Rollovers, What Are My Options?

You have several rollover options when deciding what to do with your IRA or 401k account. Make sure to think about your personal situation when reading through these options, so you can weigh what the best choice is for you. And keep in mind that more than one option may pertain to your retirement needs, especially when you consider those retirement needs in the future.

The easiest thing to do is not act at all. Keep any and all accounts exactly where they are and do not give them a second thought until you are ready to retire. As you can imagine we do not advocate this choice. While it is easier to bury your head in the sand then learn about and act on your financial future, it will only cause bigger retirement problems in the future. Can you imagine finally being ready to step away from work and all of your retirement assets are scattered between a dozen or more past employers that you have worked for over the last 40 years?

You can consolidate your retirement accounts into a Rollover IRA. If you already have a past employer or two where you are still keep your retirement funds, or an individual retirement account opened years ago when you were younger, you can transfer the funds to a Rollover IRA account, so they are all consolidated and easy to locate. This way you can add simplicity to your retirement planning. Rollover retirement accounts also allow you to rollover your money again in the future, so that you can adjust your investing goals as you get closer to retirement age.

If you like to take personal charge of your retirement funds, you can rollover into separate IRA accounts that will allow you to greatly diversify your retirement investments. Each retirement account can be given a different purpose, such as a self directed IRA that you use to purchase rental properties, or an retirement account that you do not intend to touch personally, but is set aside as a inheritance for your children.

If you are already with a new employer that offers a great 401k program, the past retirement account funds can be switched directly into the new 401k. Make sure that your new company will match a portion of the money you save from each paycheck and that the investments they offer can produce good returns with reasonable management fees. There is no point in changing out of a flexible IRA unless the retirement program your company offers is top notch.

Your final option is that you can take the money out of the retirement accounts and use them, but if you are hoping to have any ability to really retire in the future, this is a huge mistake. Any money that you take out of your 401k or IRA for personal use will be heavily taxed by the IRS. On top of that early retirement account withdrawals are hit with large penalties. Avoid this choice at all costs.

These are a sample of the options given you when deciding what choice to make with your IRA rollover or 401k rollover. It is always recommended to speak with a trustworthy broker when deciding and implementing any retirement account changes.

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