IRA ROLLOVER - Don't Miss It

Changing Employers?

We see this all the time:  someone changes jobs and rolls their previous confining 401k into the new employer's confining 401k plan.  These folks are missing out on the opportunity to have their retirement funds professionally managed from a pool of 8,000 mutual funds.  Whereas, the typical 401k plan only allows about 10 funds from one mutual fund company. There are many reasons for you to allow a professional investment advisor to manage your funds - see 'Our Investment Style'.

Retiring?

When you are approaching retirement, it is often the first time you have allowed yourself to actually consider what retirement means to you.  The change in lifestyle, the mindset that your money now has to work harder for you than you ever did for it, and the litany of instructions to decipher often leave you feeling pretty, well, numb.

For this reason, it is recommended to build a track record with the retirement professional that you feel comfortable with well before your estimated retirement.  This will 'grease the skids' for your personal well-being during the retirement process.

And yes, we do not recommend that you retire just to take on another job - i.e. managing your investments.  That is why, above all else, you must work with someone you trust.  If you do not trust that your advisor has your best interests at heart, your retirement will be made up of many sleepless nights.  That is not a very desirable or healthy retirement lifestyle.

How Is A Rollover Done?

There are several employer retirement plans that allow you to sock away pretax income.  There are 403b's, 457's and the most common 401k.  There are also Simple IRA's, SEP IRA's and 1k's for smaller employer plans that do not cost as much to administer.

Regardless of the employer retirement plan you contribute to, you can roll those funds into your own professionally managed IRA when you retire or when you change employers.  You will need to request rollover documents from your employer's human resources department.  If done correctly, you do not have to pay taxes or penalties on the rollover amount.  (Another reason you want to use a professional investment advisor).

There are many factors to consider, and you should allow your advisor to conduct a financial overview in order to give you the best professional advice considering your situation from as many angles as possible.

The rollover is a routine process for your investment advisor - allow several weeks to process the transfer.

A Trust?

Your new IRA, in effect, is a trust and your advisor's firm will already have a working relationship with the trustee.  For us, we currently use Principal Trust Company doing business as Delaware Charter Guarantee and Trust.  Therefore, your IRA will require the assignment of beneficiaries and is not tied to your family trust unless you assign your family trust as the beneficiary of your IRA.

For this reason, your IRA's are valuable estate planning tools that allow you to transfer your assets to your beneficiaries without having to go through the arduous probate process.  Often times, it is only for the sake of the house and/or other land and properties that requires a trust document to be drawn up. 

Some states even have laws that allow the assignment of beneficiaries on homes and properties.  This is called a 'Transfer On Death', or TOD document.  Since 1989, nine states have adopted TOD procedures into law.  The nine states are: Arizona, Colorado, Kansas, Missouri, Nevada, New Mexico, Ohio, Arkansas, and Wisconsin. Hopefully, more states will pass similar laws in the near future, Oklahoma and Texas included.

As always, feel free to contact any of the IRA rollover professionals at FIC.

 

Securities Offered Through Dominion Investor Services, Inc. Member FINRA and SIPC.