If you’ve been considering a 401k rollover, let’s talk. We usually don’t recommend that you leave money with a former employer, but it’s important to optimize your financial choices for the best future outcome. That’s where we can help.
We will help you not only sort through your choices, but show you the potential future returns (and fees you may pay) by leaving your money where it is, versus moving it into another investment product. In some cases, if you are getting close to retirement, you may want to shift away from market risk altogether. We can help you compare your options based on your personal situation.
In certain instances, it may become apparent in working through your tax planning issues that you may want to rollover IRA money from a tax-deferred traditional IRA to a Roth IRA so you won’t have to pay taxes in the future during retirement.
There are immediate tax ramifications if you rollover tax-deferred money into another type of account—you will have to pay taxes on it in the year you do it. Additionally, the recent change to tax laws no longer allows you to change your mind later, or recharacterize the account back to a traditional IRA later. We will help you consider the taxation and help calculate what will benefit you the most in the long run.
Many people in retirement don’t realize the impact that RMDs have on the amount of money they think they have saved up to live on. Your 401k is all pre-tax dollars, so the amounts you have to draw out as Required Minimum Distributions from each account per the IRS (by each December 31st lest you owe a 50% penalty in addition to tax!) are subject to your income tax rate for the bracket you are in for that year. Even though income tax rates have been lowered for most people, it can still trigger a bigger tax bill than you were expecting. And the new law sunsets in 2025.
SF Financial Services will help you develop a strategic plan for all of your assets which will help you have retirement income that will last as long as your retirement lasts.