401k Rollovers

A plan participant leaving an employer typically has four options (and may engage in a combination of these options), each choice offering advantages and disadvantages.

• Rollover to an IRA

Rolling over your 401K to an IRA with Gateway Capital Management allows you to consolidate your current and old 401(k)s and other workplace retirement accounts throughout your career. You can continue to save for retirement and have control, flexibility, and a centralized view of your investments.

By rolling over your 401K to an IRA with Gateway Capital Management, you will have professional financial advisor managing your investment in accordance with your risk tolerance and financial goals. This eliminates the guess work and allows you the freedom of doing what you do best - leaving the heavy lifting to a seasoned portfolio manager. In addition, you will access to the universe of investment options instead of just a small group of mutual funds that is offered in most 401K plans.  

After meeting with GCM, if we find it is appropriate to do a 401k rollover, we will assist you in processing the tax free rollover to your individual IRA in accordance with your company’s policies and procedures. 

• Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted 

Can provide the ability to consolidate assets to simplify investment decisions & overall management of retirement savings.

• Leave the money in his/her former employer’s plan, if permitted

It’s important to consider whether you may need the money in your 401k in the time range between your age, 55 to 59.5. If you retire or are laid off, you’ll be able to take distributions from your 401k without incurring the 10% penalty tax that’s usually levied on distributions taken before the age of 59.5. With an IRA, however, you may still have to wait until the age of 59.5, even if the money inside of your IRA is from a previously rolled over 401k. Loans can also be taken from the 401k where loans are not permitted against an IRA. 

• Cash out the account value

If needed, you can have immediate access to the accumulated savings in your 401k. If you have not yet reached the age of 59.5, you could incur a 10% penalty. Despite your age, all of the distribution will be taxed as earned income in the year that you take it. It is important to consult with your Financial Advisor and/or Tax Expert prior to cashing out the account value.