401k and IRA Rollover

What are 401ks and IRAs?

A 401k plan is an employer-sponsored retirement plan that allows you to save money for retirement while deferring income taxes on the savings until the time of withdrawal. Investments typically consist of mutual funds focusing on stocks (possibly including your company’s stock), bonds, and money market funds or stable value investments.

An Individual Retirement Account (IRA) also allows you to save money for retirement in a tax advantaged way. An IRA is similar to a 401k, but an IRA can be set up without the help of an employer.

What is a Rollover?

Depending on your circumstances, you may be able to take the money from your existing 401k or IRA account and transfer it into a different vehicle without suffering immediate tax consequences. Annuities funded with an IRA or 401(k) rollover are qualified plans, enabling an insurance company to create an IRA annuity into which you can deposit your retirement funds directly. Additionally, you can have your employer roll over your 401(k) funds into an annuity without withholding any taxes since no mandatory withholding requirements pertain to funds directly transferred into an annuity by an employer.

What Is the Purpose of a Rollover?

Rolling your 401k or IRA into an annuity gives you a continued tax shelter, while permitting you a huge range of index options, guarantee of principle options, and living and death benefits that can protect you and/or your family whether the stock and bond markets go up or down.

Please Note: The information provided here is for informational purposes only and is a summary of our understanding of the current tax laws and regulations as they relate to insurance, annuities, and qualified plans. The information provided is not intended to be used for purposes of avoiding penalties imposed under the United States Internal Revenue Code. You should consult with your own attorney, accountant, or tax advisor for legal, tax, or accounting advice.