Choosing a Lump Sum Distribution of your 401k

Taking the funds out of your former employer’s 401k account directly and not rolling them over to an IRA or another qualified plan is rarely the best option. The amount of your distribution will be reported to you as taxable income. What’s more, if you are under age 59 ½ you may be subject to additional penalties. The advantage of taking a direct distribution is that you have immediate access to your money, albeit at a steep cost of losing tax deferred tax status, and creating a taxable event and possible penalty situation.

As a general rule, 401k plan participants would like to keep their funds in a tax deferred environment for as long as possible. Unfortunately, many 401k participants do not directly rollover their 401k accounts, which usually results in less of a chance they will enjoy a financially secure retirement.

All 401k plan participants should capitalize on this incredibly powerful retirement savings vehicle the IRS and their employer has made available to them. Don’t make the mistake of cashing-out your 401k account after you have switched jobs or retired. When possible, obtain the advice of a professional that will help you to grow and protect your retirement assets.

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Debt Consolidation Loans – Most of DebtConsolidationLoan.com is dedicated to helping those who have a problem with debt, and its goal is to get you to a point of financial stability. So what happens when you do get your personal finances on level ground? It is time to start thinking strategically about how you save your money. See below for a lot of helpful information on the management of your 401k.

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