IN-SERVICE DISTRIBUTIONS & 401K ROLLOVERS Mistakes

Employer-sponsored retirement plans benefit many individuals. One of the benefits these plans provide is to help people accumulate needed retirement funds in tax-advantaged ways. Some participants may want to take a more active role in managing their retirement assets. They may feel that their funds should perform better than inside their employer’s plan. They may want to expose their retirement assets to different allocation choices. They may also want increased opportunity in the areas of interest rates and equity choices. Whether you have funds in a former employer plan, or a current employer plan, you may have options available for an IN-SERVICE DISTRIBUTION. The major benefits of in-service distributions include freedom, security, and control.

#1. Freedom.

If you feel your workplace plan limits your allocation choices, a personal IRA may give you different options to consider. A personal IRA can incorporate features that may not be available in your employer-sponsored retirement plan like personalized management.

#2. Security.

Traditional investment wisdom will tell you that if you diversify your investments and leave it alone long enough, come time for retirement, you’ll be fine. But what do you do when “time” approaches and the market dips and your retirement nest egg collapses by 10%, 20%, 30%, or more? Suddenly retirement doesn’t seem as comfortable as it once did. Worse, the possibility that retirement may have to be delayed altogether. If you need a more secure income during retirement or a way to limit losses in your 50s or 60s, you may want to consider other solutions.

#3. Control.

With more freedom to help protect your retirement nest egg comes a greatly increased sense of control over just exactly what you can do to realize your retirement goals, and create a lifetime distribution strategy for your beneficiaries. There may be an alternative to just accepting your employer-sponsored retirement plan. An in-service distribution may change the nature and character of your retirement possibilities and give you greatly increased input over your financial future. All it takes to begin the process is a change of mind.