Smart financial advice from local experts.. Dollars & ense Leaving Your Job? What Happens to Your 401 (k)? If you're in the early stages of your working life - or even in the not-so-early ones- the chances are petty good that you will change jobs at some point. When that happens, you'll probably leave a few things behind- but will one of them be your 401(k)? Of course, you wouldn't really forget about your 401(k) (It does happen, however over the period from 2004 through 2013, more than 25 milion people left at least one 401(k) or similar plan behind when they left their job, according to the U.S. Government Accountability Office.) But you will have to do something with your account to move your old 401(k) to an IRA. Your money will continue to grow on a tax-deferred basis, and an IRA offers you a virtually unlimited array of investment options stocks,bonds, mutualfunds and so on. You can make either a direct or indirect Essentially, you have four choices: You can cash out your 401(k) It's your money, but if you take it out before you reach 59 %, you will ówe federal income taxes, plus any applicable state and local taxes Also, you will likely be charged a 10% penalty for early withdrawal. Perhaps even more important, if you liquidate your 401(k) when you change jobs, you'll be reducing the amount you'll have Teft for retirement direct With a rollover, the administrator of your old 401(k) sends your money directly to the that holds your rollover RA No tax is withheld because you never actually take possession of the money. With an indirect rollovér, you're, technically withdrawing the money and moving it to the IRA provider yourselt. You've got 60 days to make this transfer.) You wil ce a withholding of 20 % of your account's assets, but you may be able to recover most of this amount when you file, your tax return, Still, for the sake of ease of movement and avoidance of all tax issues, a direct rollover may be more advantageous financial provider You can leave your 401(k) with your old employer If your former employer permits it, you can leáve your 401(k intact, even after you move to a different job. This might appealing to you if you like the investment choices in youraccount, but you won't be able to make any new contributions. Plus, you won't face any immediate tax consequences You can move the to Which of these, options is right for you? There's no one "righf answer for everyone. You'll have to consider several factors, your employer's 401(k), You can consolidate your old 401(k) with one offered by your new employer, if allowed. You won't take a tax hit, and you might like your new plan's investment options. And you may find it easier to manage your funds if they're allheld in money new and you' want to consult, your certainly tax professional before making any decision, But in any casè, do whatever you can to preserve and one place. hopefully grow your 401(k) assels. Youll need You can roll your 401(k) into an IRA Youdon't need the permission from any employer old or new- these resources to, help fund the retirement lifestyle you want and deserve. Joe Peacock, AAMS Financial Advisor 453 First Street Menominee, MI 49858 906-863-7870 www.edwardjones.com Member Sc Edward Jones MAKING SENSE oF INVESTING Smart financial advice from local experts.. Dollars & ense Leaving Your Job? What Happens to Your 401 (k)? If you're in the early stages of your working life - or even in the not-so-early ones- the chances are petty good that you will change jobs at some point. When that happens, you'll probably leave a few things behind- but will one of them be your 401(k)? Of course, you wouldn't really forget about your 401(k) (It does happen, however over the period from 2004 through 2013, more than 25 milion people left at least one 401(k) or similar plan behind when they left their job, according to the U.S. Government Accountability Office.) But you will have to do something with your account to move your old 401(k) to an IRA. Your money will continue to grow on a tax-deferred basis, and an IRA offers you a virtually unlimited array of investment options stocks,bonds, mutualfunds and so on. You can make either a direct or indirect Essentially, you have four choices: You can cash out your 401(k) It's your money, but if you take it out before you reach 59 %, you will ówe federal income taxes, plus any applicable state and local taxes Also, you will likely be charged a 10% penalty for early withdrawal. Perhaps even more important, if you liquidate your 401(k) when you change jobs, you'll be reducing the amount you'll have Teft for retirement direct With a rollover, the administrator of your old 401(k) sends your money directly to the that holds your rollover RA No tax is withheld because you never actually take possession of the money. With an indirect rollovér, you're, technically withdrawing the money and moving it to the IRA provider yourselt. You've got 60 days to make this transfer.) You wil ce a withholding of 20 % of your account's assets, but you may be able to recover most of this amount when you file, your tax return, Still, for the sake of ease of movement and avoidance of all tax issues, a direct rollover may be more advantageous financial provider You can leave your 401(k) with your old employer If your former employer permits it, you can leáve your 401(k intact, even after you move to a different job. This might appealing to you if you like the investment choices in youraccount, but you won't be able to make any new contributions. Plus, you won't face any immediate tax consequences You can move the to Which of these, options is right for you? There's no one "righf answer for everyone. You'll have to consider several factors, your employer's 401(k), You can consolidate your old 401(k) with one offered by your new employer, if allowed. You won't take a tax hit, and you might like your new plan's investment options. And you may find it easier to manage your funds if they're allheld in money new and you' want to consult, your certainly tax professional before making any decision, But in any casè, do whatever you can to preserve and one place. hopefully grow your 401(k) assels. Youll need You can roll your 401(k) into an IRA Youdon't need the permission from any employer old or new- these resources to, help fund the retirement lifestyle you want and deserve. Joe Peacock, AAMS Financial Advisor 453 First Street Menominee, MI 49858 906-863-7870 www.edwardjones.com Member Sc Edward Jones MAKING SENSE oF INVESTING