Individual Retirement Account Rollovers

Individual Retirement Account Rollovers



Individual Retirement Account Rollovers
IRA's (Individual Retirement Account) are very popular these days, but there is​ often some confusion as​ to​ what a​ person can and cannot do in​ terms of​ rolling the account over .​
This article will examine a​ few of​ the common issues associated with IRA rollovers .​
It is​ important to​ understand that IRA rules change often, so the reader is​ encouraged to​ check with current sources before making any final decisions concerning his or​ her IRA.
In most cases, employees have two choices when it​ comes to​ saving money for retirement .​
They can participate in​ a​ company sponsored 401(k) program or​ they may have the other option of​ participating in​ an​ IRA program.
These plans both involve putting money aside (usually a​ percentage of​ your income) into a​ tax-deferred account, but an​ IRA works more like a​ personal savings account than the 401(k) programs .​
With an​ IRA, when an​ employee decides to​ retire, quit, or​ change jobs, he or​ she can receive the money saved in​ an​ IRA as​ one lump sum .​
This is​ known as​ an​ IRA rollover .​
What the person does with that money is​ the key to​ good IRA management.
One thing you can do with the money is​ to​ convert it​ into a​ more beneficial retirement account known as​ a​ Roth IRA .​
a​ Roth IRA allows you to​ borrow against the balance with fewer restrictions than those imposed on a​ standard IRA .​
a​ company-sponsored 401(k) plan, by comparison, places severe restrictions on employee access to​ accounts.
You do not have to​ take an​ IRA rollover even if​ you retire or​ leave the company .​
In other words, you cannot be forced to​ take the money out of​ the account .​
If you wish, the account can remain with the original company until you reache retirement age even if​ you are working with another company at​ the time.
For those who want to​ move their account, most employees have 60 days from the time of​ termination to​ re-invest their IRA rollover into a​ new account or​ investment plan .​
There are some issues associated with this, however, so make sure you get expert advice before deciding on what to​ do.
All IRA account holders should understand that if​ they elect to​ keep their account with a​ former employer and the company goes bankrupt or​ hits severe financial problems their money may be lost .​
Keep in​ mind that often employers change locations over time, and this can make it​ hard for you to​ keep up with where they are (and where your money is) .​
By taking the IRA rollover at​ termination you can transfer the money directly into a​ new account, reducing your need to​ keep up with your past employer's location and financial state.
As mentioned earlier in​ this article, IRA rules have a​ tendency to​ change often and it​ is​ your responsibility to​ keep abreast of​ what is​ new and current .​
If you find that you are facing an​ IRA rollover, seek the advice of​ a​ professional who can show you the options that you have and help you make the best decision concerning where to​ put your savings.




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