These answers are informational only and are not intended to address all possible situations that might arise with respect to the question asked. You should check IRS Publication 590 for more information (keep in mind that the IRS does not stand behind any advice they give) and check with a qualified advisor before doing IRA transactions and especially before trying to correct something that may be wrong. Any tax advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax or penalties
 

WHAT YOU NEED TO KNOW

 
What happens to my vested retirement plan? There are several possibilities and you have to decide what is best for you.
 
• You can rollover your vested account value to an individual retirement account (IRA).
• It may be possible to roll your account into your new employer’s plan.
• You can take a distribution that may result in tax penalties.
• You may be able to leave the assets in your former employer’s plan.
 
How can I take control of my retirement savings? One possibility is utilizing the 401k rollover process. A direct rollover from a 401k to an IRA can be a wise decision, and if done properly, can be accomplished with no negative tax consequences.
 
What is a direct rollover? Simply put, your former employer transfers your 401k account directly to a rollover IRA provider or your new employers plan.
 
Why is this a good idea? Three reasons: taxes, control and diversification. There are no negative tax implications from a direct rollover. You have complete control of the account and can place the money with whatever qualified custodian you choose. You can diversity your account in ways that may not have been possible in your former employer’s plan. This is particularly true if a large portion of your account is invested in your former employer’s stock.
 
Why should I not take the funds directly? There are several reasons why this is a bad idea.
 
• The amount of your distrubution will be reported to the IRS as taxable income. Furthermore, if you are under
the age of 59 1/2 you may be subject to additional penalties.
• When your eligible rollover assets are distributed directly to you, 20 percent of those funds are held as a prepayment of tax liability. This is true even if you then take the funds and roll them into an IRA or another plan. The withholding can be avoided by directly rolling the retirement plan to an IRA or another retirement plan.
 
 

How can we help? A direct rollover of your retirement assets to a rollover IRA offers you the opportunity to place your assets where you want them while still maintaining the tax advantages of your retirement plan. I would be happy to assist with the government rollover requirements, go over which retirement vehicle is right for you, discuss asset allocation and diversification options and help you safely complete a rollover of your assests.