401(k) / TSP / 403(b):


 

It is essential to consider what options are available to you when starting a new job, or leaving an old one.  CUSO Financial Services, L.P. ("CFS")* Financial Advisors at NASA Federal Credit Union can walk you through the big questions when it comes to your employer retirement plans and can help you weigh the options to determine which is best for you.**

Here are a few choices you should consider:

  1. 1) Take it… Or leave it? –

    When you leave an employer with a retirement savings benefit, simply withdrawing your plan savings is easy to do, but is rarely a good idea.  Taking the lump sum can not only significantly reduce your retirement savings, it could also end up being taxed at a much higher rate and even penalized. 

    Leaving the money in your old employer’s plan may be a good idea if you’re happy with the investment choices they offer.  You won’t be able to add to it, but the funds will continue to grow according to how it is invested. 

  2. 2) Transfer to your NEW employer’s retirement plan –

    If you start a new job which also offers a retirement plan as a benefit, you can transfer your funds from your previous employer’s plan to your new one.  This is usually a seamless process that allows your retirement savings to remain tax deferred without interruption.

  3. 3) Rollover the funds into an IRA –

    Perhaps the most popular option among investors is to roll the funds over into an IRA.  This can be an IRA you already have, or you can open a brand new IRA to receive the funds. 

    There is no dollar limit on how much money can be transferred from an employer plan to an IRA, and doing so offers many great benefits such as:

    CHOICES:   There are generally more investment choices in an IRA than an employer sponsored plan.

    FLEXIBILITY:  You can easily consolidate different employer plans into one place, or open multiple IRAs.

    ACCESS:     Distribution options may be more flexible with an IRA than with your employer’s plan.

    CONTROL:  You will have more control over your investments as you get closer to retirement.

 

Check out our financial planning calculators to help you make the best financial decisions, or connect with your CFS advisor to determine the best fit for your circumstances, and open a rollover IRA today:

**Before deciding whether to retain assets in an employer sponsored plan or roll over to an IRA an investor should consider various factors including, but not limited to: investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock.


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*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor.  Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. NASA Federal Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.


CUSO Financial Services, L.P. and its representatives do not provide tax advice. For such advice, please contact a tax professional.