401k Rollovers

IRA Rollovers from Employer-Sponsored Retirement Plans

Important Information

Guide to IRA Rollovers from Employer-Sponsored Retirement Plans

If you are considering a rollover from an employer-sponsored retirement plan, please read the following pros and cons of rolling over your account balance very carefully before you make a decision to set up an IRA with your LPL Financial Advisor.

YOUR OPTIONS Remain in your plan

+ PROS

Continue any tax-deferred growth
Avoid early withdrawal penalties
Move your savings to another retirement plan later
Have continued access to your plan
Protection from creditors
May have lowerfees
May be able to delay required minimum distributions past age 70 ½

- CONS

Limited to the plan’s investment options
May not be able to remain in the plan if your account is less than $5,000
You can’t take a loan against your old 401(k) plan

Rollover to another employer’s plan

Continue any tax-deferred growth
Avoid early withdrawal penalties
May be able to consolidate your retirement assets in one account
May be able to borrow from the plan
Protection from creditors
May have lower fees

Limited to the investment options offered by that plan
May have limits on how you move your money between the investment choices in the plan

Rollover to an IRA

+ PROS

Continue any tax-deferred growth
Avoid early withdrawal penalties
Have the flexibility to select investment options that fit your specific needs.
Choose a Roth after-tax account, ifappropriate
Consolidate your retirement assets in one convenient place as you change jobs

- CONS

Can’t borrow against your assets
Annual fees and/or commissions may apply, and may be higher than your plan
There may be custodial and other maintenance fees
As securities held in the plan generally can’t be transferred to the IRA, commissions charged on transactions in the IRA will be in addition to commissions and sales charges previously paid on transactions in the retirement plan

A Final Option: Take a Distribution in Cash

You can decide to take the money out of your plan. Taking a distribution in cash means you will have some money right now, but this option can come with a price. For example, if you are under age 59½, a 10% early withdrawal penalty may apply; your distribution may also be subject to state and federal taxes. In addition, you may also owe a mandatory 20% federal withholding tax. Taking a distribution of shares of company stock may lower taxes, if eligible. If you are thinking about cashing out, be sure to factor in these penalties and consider if you would be better off keeping your money invested for the long term. Please consult with your tax Advisor for additional information.

This material is provided by LPL Financial and your advisor for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.

Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

Please note that securities and insurance products offered through LPL Financial are:

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401k Rollovers

IRA Rollovers from Employer-Sponsored Retirement Plans

Important Information

Guide to IRA Rollovers from Employer-Sponsored Retirement Plans

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