One of the most important things to think about after retirement is the nest egg you have been building for all these years. Since you are not employed, you have complete responsibility and choice over where you can invest your money for the future. One question you will ask yourself, is should I invest my retirement plan in an Individual Retirement Account (IRA) by doing a 401K rollover.
The fees you experienced while in your 401k or 403B are usually much higher than you will experience with an IRA. In a 401 or 403B the funds are usually in a mutual fund and those have expenses. The fees are considerable less with an IRA since they are usually invested in indexed funds vs mutual funds. We can’t control how are investment perform year after year but we can control the fees we pay, which directly impact our total returns.
If you rollover your 401K or 403b to a Traditional IRA you will not have to pay taxes. The only exception is if you are rolling your money over from a tax-deferred account into a Roth IRA, which is known as a conversion.
With tax-deferred accounts such as 403b and 401k you receive a tax deduction when money is invested and you are expected to pay later when you deduct from your account which is usually at a lower income bracket. If you roll over the funds from a traditional plan to a Roth IRA, you will have to pay taxes.
One of the main benefits associated with IRA’s are the vast investing options. There are many Insurance Company providers that offer a range of options such as index funds and indexed bonds that have track records that have outperformed the S&P while guaranteeing you will not lose money if the market takes a turn for the worse. When you retire your first objective is to protect what you have earned. Let us at First Family Insurance Group help you participate in market gains while protecting your retirement so you can prosper for years to come.