Tag Archives: retirement

Changing Jobs: What About My Old Retirement Plan?

rollover retirement planWhat do you do with your old retirement plan when you change jobs?  First and foremost, don’t take a lump-sum distribution from your old employer’s retirement plan.  It generally will be taxable and, if you’re under age 59½, subject to a 10% early-withdrawal penalty.

3 Alternatives to Cashing Out Your Old Retirement Plan:

1. Stay Put: Leave Your Old Retirement Plan in Place

You may be able to leave your money in your old plan.  But if you’ll be participating in your new employer’s plan or you already have an IRA, keeping track of multiple plans can make managing your retirement assets more difficult.  Also consider how well the old plan’s investment options meet your needs.

2. Roll Over to Your New Employer’s Plan

This may be beneficial if it leaves you with only one retirement plan to keep track of.  But evaluate the new plan’s investment options.

3. Roll Your Old Retirement Plan Over to an IRA.

If you participate in a new employer’s plan, this will require keeping track of two plans. But it may be the best alternative because IRAs offer nearly unlimited investment choices. There are additional issues to consider when deciding what to do with your old retirement plan.

Our C&P Wealth Management Team can help you make an informed decision and avoid potential tax traps. Contact James Komos, CPA, CFP, MAcc at 216-831-7171,  jkomos@cp-advisors.com, or submit an inquiry on the contact us page of our website for more information.

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Retirement Planning: When to Increase Contributions

Should you Increase your Retirement Plan Contributions in 2014?

Retirement PlanningIt’s time to start thinking about 2014 retirement plan contributions. Contributing the maximum you’re allowed into an employer-sponsored defined contribution plan is likely a smart move.

Retirement Planning: Contributing the Maximum

When planning for retirement, you can reap major benefits from maximum contributions for these reasons:

1. Retirement plan contributions are typically pretax.
2. Retirement plan assets can grow tax-deferred — meaning you pay no income tax until you take distributions.
3. Your employer may match some, or all, of your contributions pretax.

Also, consider contributing to a traditional IRA. If you participate in an employer-sponsored retirement plan, your IRA deduction may be reduced or eliminated, depending on your income. But you can still benefit from tax-deferred growth.

Consider your Roth options as well. Contributions aren’t pretax, but qualified distributions are tax-free.

Retirement plan contribution limits generally aren’t going up in 2014, but consider contributing more this year if you’re not already making the maximum contribution. And, if you are already maxing out your contributions, but you’ll turn age 50 in 2014, you can put away more this year by making “catch- up” contributions.

Type of contribution 2014 limit
Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans $17,500
Contributions to SIMPLEs $12,000
Contributions to IRAs $5,500
Catch-up contributions to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans $5,500
Catch-up contributions to SIMPLEs $2,500
Catch-up contributions to IRAs $1,000

For more retirement planning ideas on making the most of tax-advantaged retirement-savings options, contact Jim Komos at 216-831-7171 or via email at jkomos@cp-advisors.com. You can also submit an inquiry at our contact us page.

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