Consolidating inherited iras
Intended to help provide financial security later in life, these assets need to be managed carefully and invested wisely in order to help ensure that they will be available when eventually required.
As compared with employer-sponsored retirement accounts, a rollover IRA can provide you with the broadest range of investment choices and the greatest flexibility for distribution planning.
This withholding will apply as long as the employer's check is made out to you - even if you plan to place equivalent cash in an IRA immediately.
To avert the withholding, you must first set up; your rollover IRA, and then request that your employer transfer your assets directly to the custodian of that IRA.
Your retirement plan assets may be one of the most important legacies you take with you when you move from one job to another.
One common goal of planning for a lump-sum distribution is averting unnecessary tax withholding.
Under federal tax rules, any lump-sum distribution that is not transferred directly from one retirement account to another is subject to a special withholding of 20%.
This small and scattered approach increases the potential for asset leakage and ineffective portfolio management, which can cut into the eventual value of your holdings.
It may also set the stage for untimely tax burdens and increased investment management costs, which can reduce your effective long-term rate of return even further.