Learn How to Move Your Old 401(K) Into a Rollover IRA
When it comes to growing your money over the long term, studies have shown that tax advantage is one of the biggest benefits you could have in growing your money. The tax advantage is a main reason Individual Retirement Accounts (IRAs) and 401(k)s are so popular when it comes to saving for retirement.
One of the most important and misunderstood aspects of owning an IRA or 401(k) is how you should approach taking income or withdrawals from those accounts. If you don’t know the rules, you could end up paying more in taxes than you need to.
Rollover a 401(k) to IRA – Tax Consequences
When it comes to taxation, there are three different types of investments: 1) regular taxable investments; 2) tax-free investments, like Roth IRAs; and 3) tax-deferred investments, like traditional IRAs and 401(k)s, which are taxable when you decide to withdraw your funds.
Taking advantage of the tax benefits that IRAs and 401(k)s provide can help to boost the amount of income your investments can generate in retirement. However, since tax codes are constantly changing, you must make sure to keep up with the changes.
Through our tax minimization strategies, ASC Financial Group can advise you on some of the best ways to withdraw funds from your qualified retirement accounts so you can maximize the tax advantages offered by each one. In other words, we’ll keep up with the changing tax codes so you don’t have to.
IRA Rollovers
One of the services we offer that can help you maximize the tax advantage includes rolling over a 401(k) to an IRA. Doing so can not only provide you with access to more investment options, but it can also help to lower the fees you pay.
IRA Rollover to Roth IRA – Tax Implications
Converting a 401(k) to a Roth IRA is another way that may provide certain tax benefits. For example, you could convert some funds that are in a qualified retirement account, like a 401(k), into a Roth IRA ahead of retirement. Although you’ll still owe taxes on the amount you convert, you won’t have to pay taxes on withdrawals you make later in retirement.
Give our office a call to schedule a complimentary consultation with one of our advisors so we answer any IRA or 401(k) questions you might have, including:
- What is the cost to roll over a 401(k) to a Roth IRA?
- What is the best time to convert a 401(k) to a Roth IRA?
- Can I transfer my 401(k) to an IRA while still employed?