When it comes to retirement savings, there are a number of benefits that entice people to not only purchase retirement investments but to shift those investments from time to time. This is often termed as a Rollover in Colusa. However, it’s important to remember that one of the benefits of certain retirement savings plans is the tax-free nature of the fund itself and any contributions made to the fund. To keep this intact during a rollover, a lot of care will need to be taken in how it is handled.
If a person is looking to take money from one IRA account and put it into one that is performing better, the concern about incurring extra taxes is typically reduced. Rolling IRA funds from a traditional IRA to another traditional IRA is not subject to any taxation. The same is true when moving funds from a Roth IRA account to another Roth IRA account. However, rolling over funds from an employer-provided 401(k) to a traditional or a Roth IRA account can be tricky.
In many cases, this rollover will need to happen within 60 days of receiving the funds from the 401(k). If the funds are transferred within the 60 days, the IRS can’t assess taxes to the lump sum that was paid to an individual from a 401(k) retirement plan.
Another thing to consider are the fees involved in rolling over funds. A common practice in the financial sector is to advertise free rollovers. This may seem like a good idea, but there will be certain fees assessed to the account, such as account management. Many times, these fees are exorbitantly high to compensate for no fees being charged to the actual rollover of the funds. That’s why it’s important to look at the language of any agreement to ensure that a person isn’t paying more for a “free” rollover than they would for a rollover that charges fees for the actual process.
These are just a few of the things that need to be considered when a person is thinking about a rollover in Colusa. If you want to make the most out of your tax-free investments and move your money to a better retirement plan, it’s best to Contact us to learn some of the details of these types of rollovers and to avoid any potential taxes or high fees being charged in the process.