Rollover funds choose a strategy that works for you

PRIME – July 2014 By Jean M. Deliso President, Deliso Financial and Insurance Services At some point, many people with retirement or employer-sponsored investment accounts will be faced with the decision of what to do with rollover funds. This can happen when you change jobs and cash out a 401(k), or when you retire. As President of Deliso Financial and Insurance Services, these cases are often brought to me. I stress the importance of thinking through the various options. Ideally, it's best to choose a strategy that meets your retirement needs, minimizes the impact of taxes, and avoids penalties. Please note this is a general overview, and tax laws can be tricky, so be sure to talk to an accountant and/or tax attorney before making any financial decision. … Roll it over – One possible option is to directly roll your entire distribution into a new Individual Retirement Account (IRA) or an employer-sponsored 401(k). Either one would allow you to continue to defer taxes and enable you to continue building your retirement savings for the future. … Leave it where it is – You may want to keep funds in your employer's plan until you reach the plan's retirement age, if that's an option. This may be ideal if you want to take advantage of certain investment options or managed money services available in your existing plan. Your funds will remain tax-deferred and can later be moved to a new employer's qualified plan or an IRA. … Take the taxable distribution – Depending on your situation, you may choose to withdraw the funds from your 401(k). Although you will have immediate access to your savings, there are a few things to consider when taking a lump-sum distribution. First, your money will no longer have the potential to grow tax-deferred. Second, it will be subject to ordinary state and federal income taxes. Additionally, if you are under age 59 , a 10 percent IRS penalty may apply. Please note: Rollovers must be completed no later than the 60th day after the day you receive the distribution. Jean M. Deliso, registered representative offering securities through NYLIFE Securities LLC, Member FINRA/SIPC, a licensed insurance agency located at 360 Bloomfield, Windsor, Connecticut, 06095 Tel. 860-285-8884 *Financial advisor offering Investment advisory services through Eagle Strategies LLC, A Registered Investment Advisor. Deliso Financial and Insurance Services is not owned or operated by NYLIFE Securities LLC, or its affiliates. Neither New York Life Insurance Company, nor its Agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professionals before making any decision. Also, state laws vary with respect to charities and **Agent licensed to sell insurance through New York Life Insurance Company and may be licensed to see insurance through various other independent unaffiliated companies.