by BECU Financial Advisor,posted Oct 27 2011 1:11PM
If you have or are preparing to change jobs, do you know what your choices are for managing the money in your previous or current employer’s retirement plan?
Although many people choose to take cash distribution, there are other options that may benefit you more.
Taking a lump- sum cash distribution may trigger an immediate 20% federal withholding tax and in addition, a 10% tax penalty may apply if you are younger than age 55.
Check with your current or new employer to see if you are able to roll over your previous retirement plan to theirs. If this is not possible, you may want to consider rolling the money to a traditional IRA.