| At some point in the future, you will no longer be | | | | form of taxes withheld when he files his tax return, but |
| working where you are. Whether it's because you | | | | that could take a number of months. Why go through |
| retire, get laid off or change employers, it's your | | | | this hassle when using the correct transfer method will |
| responsibility to be prepared. It's a necessity -- your | | | | avoid the 20% withholding and will not make you |
| retirement depends on it.That's because when it | | | | scramble to find funds to cover the withholding |
| comes to your pension funds, you have several | | | | amount?Build Your Wealth and Retire Financially |
| options open to you when you leave your job. And if | | | | Secure With Your 3 Other OptionsYour other options |
| you don't know what those options are, and choose | | | | include (1) leaving your money with your former |
| the wrong one, you will have the IRS smack dab in the | | | | employer's plan; (2) rolling it over to your new |
| middle of your IRA. This means your chances of | | | | employer; or (3) rolling it over to an IRA.Each of these |
| having the opportunity for long-term tax deferred | | | | options will help keep the IRS out of your IRA, if you |
| wealth building become very slim.Option 1: Taking a | | | | choose wisely and follow all the rules, which can be |
| lump-sum distribution (cash out)Off the top, you will lose | | | | complex. However, there's more to consider than |
| 20% of your accumulated money because your | | | | merely the tax implications. What about growth? |
| employer is required to withhold this amount for federal | | | | Safety? The next Enron?Retire Financially Sound or |
| taxes. Cashing out your retirement plan is counted as | | | | Retire With Debt - It's Your Responsibility To Make |
| receiving ordinary income, and depending on your tax | | | | The Right ChoiceSo, in conclusion, taking a lump-sum |
| bracket (ordinary rates now reach 35%) you may end | | | | distribution (cash out) from your 401K means that all |
| up owing even more than that 20%, and that doesn't | | | | the money you withdraw will be subject to income tax |
| include the state taxes that may apply as | | | | at ordinary income rates that now reach 35%. And |
| well.Furthermore, if you are younger than 59½ | | | | don't forget that additional penalty of 10 percent on top |
| (age 55 in some limited cases) you will be penalized | | | | of the ordinary income tax if you leave your job |
| for an additional 10% off the top. So, our old pal Uncle | | | | before age 55. This will leave you with no tax |
| Sam just slashed your retirement savings you have | | | | deferred wealth building for you and your family, which |
| accumulated for your Golden Years by a third or | | | | means there is a good chance you will not retire |
| more!Avoid this entirely. (In fact, it's difficult to even | | | | financially secure. Is that what you want for you and |
| think of it as an "option.")For example, Dan, age 50, left | | | | your family?Avoiding all the pitfalls and dangers can be |
| his job. He had $100,000 in his employer's 401(k) plan. | | | | accomplished by choosing the right kind of rollover for |
| Dan decided to take the money from the plan and | | | | your IRA, based on your specific, individual and unique |
| open a self-directed IRA account. As a result Dan's | | | | situation.Remember, this is your retirement nest egg. |
| former employer sent him a distribution check for | | | | The better you can protect it and invest it, the farther |
| $80,000 -- Dan's $100,000 account balance, less 20% | | | | along the road to a glorious retirement you will find |
| withholding. To avoid all income taxes and penalties, | | | | yourself.Paul Hooper, President of Marketracker |
| Dan must not only deposit the $80,000 check within 60 | | | | Capital Management, Inc. can help you keep the IRS |
| days of the distribution, he also must deposit $20,000 | | | | out of your IRA. Learn how to make smarter choices |
| (the amount withheld by his employer) by that same | | | | with your money by emailing to receive a FREE |
| date. The $20,000 must come from sources outside | | | | SPECIAL REPORT full of ideas and tips on how to |
| of the distribution. If Dan does not have $20,000 from | | | | keep the IRS out of your IRA and roll it over in a way |
| other sources, that amount will be treated as a | | | | that will lead you to a life of prosperity. Be sure to |
| distribution and will be subject to income taxes and | | | | include SPECIAL REPORT in the subject line to ensure |
| penalties.Sure, Dan will get this $20,000 back in the | | | | a safe delivery. |