If you have been employed by a company for a long time, you may be wondering now that you?re self employed ? and own your own business ? what to do with your 401(k) or your 403(b) from your employer.
You?ve been asking yourself ?Can I roll over this 401(k) into another plan?? You can absolutely rollover a 401(k) to a secondary retirement plan, you just have to be careful what type of a plan it is!!
When you have a 401(k) it has ?tax preferential? status and if you ?blend? funds from other non-preferred plans (such as a regular Individual Retirement Account (IRA)) then you can lose that status.
It is critical when you fill out the account application for your new rollover account that you SPECIFY that this is a 401(k) and you wish to ?roll it over? to a QUALIFIED account.
Many mutual fund companies and other financial institutions will designate this account as a ?ROL? account ? designating it as ?qualified funds?.
Which Retirement funds are Qualified?
Accounts that are termed ?qualified? are from specific types of pension plans. They include (but are not limited to) 401(k) accounts and 403(b) accounts or 457 Accounts. IRA Accounts are NOT considered to be a qualified account, nor are ?PEN? (Pension) accounts.
- 401(k) accounts are defined as:employer sponsored defined contribution plan
- 403(b) accounts are defined as: tax advantaged plans for public education or non profit employees
- 457 accounts are defined as: tax advantaged plan generally limited to government or municipal employees
Things to Avoid
It is critical when you open this account that you DO NOT add any money to it that is not designated as ?qualified?. This includes SEP (Simplified Employee Pension) Individual Retirement Account (IRA), RIRA (Roth Individual Retirement Account) and some other ?non qualified? accounts.
As a self employed person you have different options than 401(k) accounts ? do not add these funds to your rollover ? if you decide to go back to an employer you will have the ability to add these ROL funds to your current qualified retirement plan.
Helpful Retirement Links
- A Guide to Understanding IRAs and 401(k) Plans
- When many companies stopped offering good pension plans, more employees turned to IRA accounts and 401(k) plans to help them prepare for retirement. While many employers offer 401(k) plans that employees can contribute to, many employees do not have
- Accendo Traders ? Home
- Accendo Traders: Stock Market Traders.
- Putnam Investments
- Putnam Investments manages mutual funds and other financial products for investors around the world. Putnam has over 65 years experience and manages mutual funds, IRAs, 401(k)s, 529 college savings plans, annuities, institutional portfolios and separ
- Individual Retirement Account (IRA)
- Individual Retirement Account (IRA) ? Definition of Individual Retirement Account (IRA) on Investopedia ? An investing tool used by individuals to earn and earmark funds for retirement savings. There are several types of IRAs: Traditional IRAs
About Doreen Martel
Well-rounded freelance writer who contributes to various blogs, paid to write sites and revenue sharing sites. Doreen is legally blind and has worked at home for more than 10 years. She uses the lessons learned from this experience to enhance her writing and share information with others.
Related Posts:
Source: http://freelancingandmore.com/2012/12/20/your-retirement-your-business/
olympia snowe davey jones dead monsanto boston weather dr seuss birthday jennifer garner jennifer garner
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.