Who wants to think about getting old! This is probably the most common reason given when individuals are asked about whether they have planned for their retirement. Of course no one likes the idea of getting old but there are several things that you can do to make sure you enjoy the later years of your life without the stress and hassle of financial concerns.
The popularity of 401ks are a great place to start. Make sure you are aware of how your money, in your 401k is being invested (if at all) by the investment company. This is particularly important for people who may have one or several 401k from previous work experience. It is advisable to seek out help from a financial advisor when dealing with 401k accounts because the tax rules and guidelines are complicated and mistakes can result in some fairly large fees.
Removing money or rolling over an IRA are both options in dealing with 401k accounts. But there are strict procedures and time limitations that have to be adhere to so that you will not have money withheld or a penalty applied.
Before the rollover process begins makes sure you research and decide upon the investment company you want to have your 401k funds place into. If you are currently working and that job offers you a 401k you can combined 401k’s into a single fund. By not using an outside financial advisor you save time and money. Options of investments may include brokerages, banks, and mutual funds. You will need to get an IRA application form and learn the procedures to file a rollover request. Most IRA companies offer phone support and if you have any questions you should contact are representative.
Once you understand how a 401k rollover works and how to open and fun your IRA you ready to begin the process. Many IRA companies require that you have an account with them before the rollover. Yes this will cost you money but if you are satisfied with the company particulars and feel like you can trust their investment sense it is well worth the extra money.
A direct rollover is when the money from your 401k is deposited directly into the IRA. This is important because the government will not be able t withhold income tax from this money and therefore there is no extra fee associated with the rollover. Some institutions will actually send a check and if that occurs then the check can be directly deposited into your new 401k.
At 59 and a helf you can begin receiving benefits from your retirement funds. These may include IRAs and 401k’s. It is advisable not to touch the money within your retirement accounts until you reach retirement age. This is because there is a 10% penalty fee if you need to access that money. However, if you are in need of money you can get a loan against your IRA. This keeps you sheltered from penalties and taxes and allows you to use your hard earned money.