U.S. Money Reserve on Protecting Your Retirement When Changing Jobs
Personal_Finance / Employment Dec 23, 2020 - 07:06 PM GMTBy: Sumeet_Manhas
The days when an employee stuck with one company throughout their career are largely gone in the U.S. Instead, many workers switch jobs every few years, seeking new opportunities for professional development and salary increases. While a focus on one’s career mobility can be positive, one aspect of such a change is too often neglected—retirement savings. For guidance on how to help protect the savings you have worked hard to earn, we turn to some helpful information via U.S. Money Reserve.
Options When Switching
The information compiled by U.S. Money Reserve can help people learn what to do with an existing employer-sponsored plan when switching jobs. One helpful resource comes from the U.S. Securities and Exchange Commission, which defines four top options for how to handle such a move.
Lump-Sum Distribution: The first option outlined by the agency is the distribution of a retirement account as a single payment. Such a distribution pays out the full amount of the savings account to the person who requests the withdrawal. This may be a helpful option if you want immediate access to your savings, but use caution when exercising this choice, especially if you are under the age of 59.5. If that is the case, you could be liable for taxes and potential tax penalties on withdrawn funds.
Alternative Retirement Plan Rollover: If you have a plan with a previous employer and want to move that plan over to your new employer, you may be able to make such a switch without handling the funds yourself. This can be a convenient option, but it requires that your new employer accepts such transfers. Check with your new employer to see if this is available to you.
IRA Rollover:You also have the choice to move your retirement funds over to an individual retirement account (IRA) when leaving a company. A rollover may give you additional options for how to manage your funds, such as through a self-directed IRA. Rules and regulations around IRAs can differ from 401(k)s, so it is important to seek out additional information, potentially from a retirement professional, before selecting a rollover.
No Change: You may also be allowed to leave your retirement funds where they are. To avail yourself of this option, it can be helpful to contact your previous employer and see what their policies are about keeping your retirement funds as is.
Important Details
There are a variety of important considerations to take into account when switching jobs and, potentially, retirement accounts. To make an informed choice, it is important to familiarize yourself with the documentation for your existing retirement plan. You can accomplish this by reading the Summary Plan Description (SPD) that an employer is required to give free of charge to employees who participate in ERISA-covered retirement plans.
An SPD provides an in-depth guide about key plan details, such as the benefits it provides and how it is managed. Typically, these documents also cover when employees are eligible to participate in a plan, how to claim benefits, and when benefits become vested. Familiarizing yourself with this information can equip you with the knowledge you need to make choices about your savings.
Seeking Guidance
While this information can be a great starting point for protecting your retirement savings as you transfer jobs, it is no substitute for the opinion of a professional. A tax advisor or financial professional can be a great resource when considering such a decision because they are typically familiar with relevant tax regulations, financial management principles, and other considerations important for making an informed decision.
U.S. Money Reserve is also available to provide free information on the possibilities of including precious metals in a self-directed IRA. They can explain how the use of precious metals could complement your existing retirement savings and how precious metals can function as a hedge against volatility or as a diversifying component of a financial portfolio.
About the Company
U.S. Money Reserve is a supplier of government-issued precious metals and has been recognized for its quality customer service. This recognition often highlights the skills of its talented team of Account Executives who are committed to providing personalized information tailored to a customer’s goals. The work conducted by this team is guided by company president and former director of the U.S. Mint Philip N. Diehl. His expertise with both public policy and personal financial freedom has equipped him for his work at U.S. Money Reserve.
By Sumeet Manhas
© 2020 Copyright Sumeet Manhas - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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