No one likes to think about getting old. This is one of the most common reasons given when individuals are asked about whether they have planned for their retirement. But there are several things you can do to make sure you can enjoy the later years of your life without having any financial concerns.
A great pace to start is the popularity of the 401k. Be sure to be aware of how your money is being invested by the investment company. This is especially important for people having one or several 401k from previous work experience. The tax rules and guidelines are complicated so be sure to get some help from a financial advisor to not make any mistakes as this might result in some fairly large fees.
Two of the options to deal with 401k accounts is removing money or rolling over an IRA. Be sure to know the strict procedures and time limitations so you don’t get any money withheld or even a penalty applied.
Make sure to research and decide upon the investment company to have your 401k funds placed into prior to beginning the rollover process. If your current job offers you a 401k you can combine your 401k accounts into a single fund. You can save time and money if you do not use an outside financial advisor but be sure that you know what you do if you take this route. Mutual funds, banks and brokerages may be options of investments. To file a rollover request you need to get an IRA application form and learn how the procedure works. Most IRA companies offer phone support and if you have any questions you should contact their representative.
Once you understand how a 401k rollover works and how you can open and fund your IRA you are ready to begin the process. Many IRA companies require that you have an account with them before the rollover takes place. This will cost you money but if you are satisfied with the company and feel you can trust their investment sense then this is well worth the extra money.
If you deposit the money from your 401k directly into the IRA it is called a direct rollover. This way the government will not be able to withhold income tax from this money and therefore ther will be no extra fees associated with the rollover. Some companies send you a check and this check can be directly deposited into your new 401k.
Once you are 59 and a half years old you will begin receiving the benefits from your retirement funds. These may include IRAs and 401ks. You should not touch the money in your retirement accounts until you reach this retirement age because there will be a 10% penalty fee to access that money. However, you can get a loan against your IRA if you are in the need of some money. This will keep you away from penalties and taxes and still allows you to use your hard earned money.
