Retirement Planning - A Financial Freedom Summary

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Want to Meet during AEP Annual Enrollment for the upcoming Medicare & Health Plan Season?
Note: The appointment links below are for those wanting to make changes or initiate a new plan for the following January 1. There are specific dates to make these changes as per below.

Medicare AEP Annual Enrollment Appointment Office / Video or Phone Consultation: October 1 - December 7 each year - Set Medicare AEP Appointment
ACA Health Insurance Appointment (Non-Medicare) Office, Video or Phone Consultation: November 1 - December 15 - Set ACA Health Appointment

Or call Greg Directly at (435) 767-1415 to see if he can take your call right now

image Greg has been helping clients retire well since 1997. You built up your retirement fund. You deserve to spend it the way you want. But what if you live longer than you have funds? What if the stock market decides to take back the gains you made while working? We have a solution: Don't gamble with your retirement funds!

Let us help you put that well earned nest egg in a safe place. Your 401k or other retirement vehicle was meant to grow over the years. And it probably did very well! But can you afford the stock market swings you almost ignored back when you were employed? You probably didn't even give it a second thought. The swings were there, but you didn't need the money then.

That was then. This is now. Let us help you lock in your stock market gains with a safe, secure annuity that will allow you some market growth, but won't ever allow you to lose a penny. Not one red cent! Call Greg now (435) 767-1415 to schedule a retirement consultation.

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So What to do with an Old 401k from a Previous Employer?

If you have a 401(k) or a 403(b), or similar from a previous employer situation, you most likely have questions. Studies show that over 1/3 of retirees or employees that leave a company don't know what to do with their retirement plans.

Leave it with the old company? Or maybe roll it over to a new plan?

Since your 401(k) funds are often a major part of your retirement savings, it's important to carefully consider what would be the best option for your long term retirement situation.

You usually have the following choices:

1) Leave the money in the the prior employer's plan
2) Rollover the funds to an Annuity, IRA or Roth IRA
3) Roll over the funds to a new employer's plan
4) Cash out, or withdraw the funds

The following is a discussion on the options and the possible consequences that should be considered before making such an important decision.

Option 1: Leave the money in the prior employer's plan

You need to discuss the situation with your former employer and make sure their rules allow for you to leave the plan with them. Most of the time the company would allow you to keep it in their plan. But occasionally their rules make you take it with you or transfer/roll it over.

This option makes sense for the following reasons:
A) Penalty free withdrawals in or after the year you reach age 55 AND want to take withdrawals before turning age 59-1/2.
B) Some types of funds can't be rolled over (ie discounted or institutionally priced investment options)
C) You might like the previous employer's money management philosophy and like the returns they are getting.

Things you might consider in your decision:
A) Some companies automatically forward you the balance of your 401(k) if the value is under $5,000.
B) You can no longer make contributions to the prior fund since you are not employed there anymore.
C) There may be limited investment options in the company plan than an Annuity or IRA.
D) Options for withdrawal might be limited. Some only allow partial withdrawals instead of the full amount.
E) There are often extra administrative or other fees or limited transaction options.

Option 2: Rollover the funds to an Annuity, IRA or Roth IRA

If you choose to roll over your 401(k) into an IRA you continue to get tax deferred growth. You also would usually have many more investment options than the prior employer's plan offered. The following are some benefits you would have from rolling over your 401(k).

Income for Life:
Rolling over a 401(k) to an Annuity can offer security with a lifetime of income. If you want to start taking withdrawals as regular income in retirement. Under some circumstances you can roll the money into an Annuity. This can give you the additional option of a lifetime of income that is guaranteed as long as you live. These options are not available with a regular employer 401(k) that ceases to offer income after the fund is exhausted. It also offers you protection from the ups and downs of the markets when you may need the money the most. You also would have a combined statement that gives you a better view of your total retirement picture.

Convert to a Roth IRA:
This option provides federal tax-free withdrawals if all conditions are met. Penalty-free withdrawals for first-time home purchase or qualified education expenses if you're under age 59-1/2.

· Free one-on-one guidance, help in choosing appropriate investments, and money management services.

But take into consideration that:

· After you reach age 70½, you're required to take minimum required distributions from an IRA (except for a Roth IRA) every year even if you are still working. If you plan to work after age 70½, rolling over into a new employer's workplace plan may allow you to defer taking distributions.5

· If you need extra protection from creditors outside bankruptcy, federal law offers more protection for assets in workplace retirement plans than in IRAs. However, some states do offer the same or similar protection for IRAs too.

A special case: company stock

If you hold company stock in your workplace savings account, consider the potential impact of Net Unrealized Appreciation (NUA) before electing to make a rollover. Special tax treatment may apply to highly appreciated company stock if you move the stock from your workplace savings account into a regular (taxable) brokerage account rather than rolling the stock into an IRA. You may want to consider asking your financial adviser or tax accountant for help on how a NUA may apply in your situation.

Option: Consolidate your old 401(k) assets into a new employer's plan

Not all employers will accept a rollover from a previous employer's plan, so you need to check with your plan administrator. If your employer does, the benefits may include:

· Continuing to position your assets for tax-deferred growth potential.

· Combining accounts into one for easier tracking and management.

· Deferring minimum required distributionsif you are still working after you turn age 70½.5

· Borrowing against your retirement plan assets (not all plans allow loans).

· Investing in lower cost or plan-specific investment options.

But consider this:

· Your 401(k) may have a limited number of investment options.

· You will be subject to the new employer's plan rules.

Option: Cashing out

Taking the assets out should be a last resort. The consequences vary depending on your age and tax situation, because if you tap your 401(k) account before age 59½, it will generally be subject to both ordinary income taxes and a 10% early withdrawal penalty. In fact, in a Fidelity survey, more than half (55%) who cashed out of a 401(k) said they would not make the same decision again.6

An early withdrawal penalty doesn't apply if you stopped working for your former employer in or after the year you reached age 55, but are not yet age 59½. This doesn't apply to rollover assets.

If you are under age 55 and absolutely must access the money, you may want to consider withdrawing only what you need until you can find other sources of cash.

Call Greg now (435) 767-1415 to schedule a retirement consultation.

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"ObamaCare" ACA Health Exchange

We can help you get a health plan on or off the ACA "ObamaCare" Exchange. We help you apply for the subsidy and pick the right plan.

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Medicare Health Plans

If you are eligible for Medicare, we have all the plans that work with Medicare Parts A & B. Get Medicare Supplement Plans or the popular Medicare Advantage MAPD

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PDP Prescription Drug Plans

Picking the right PDP is very important. We carry all the major plans in the market. Call us today to see if you qualify.