If you fall into any of these categories…

• I left my old company and I need to figure out what to do with my old plan
• I’ve got “zombie” plans sitting around and I’ve got questions about what I should do with them
• I’m at or nearing retirement and I need to figure out how to turn my retirement plan into income

You’re in the right place. After you’re done reading this guide, you’ll decide which of these strategies makes the most sense for your old retirement plan and know how to take the next steps that are right for you.

This guide will help you answer questions like:

• What should I do with the retirement plan at my old employer?

• Do I have to move it?

• Where should I put it?

• Will I owe taxes on it if I move it?

• What kind of IRA do I need?

• How do I turn it into retirement income?

Inside, you’ll find:

• Your 5 options for handling old employer plans [including 401(k)s, 403(b)s, and some 457 plans]

• The steps you need to follow to execute on each option

• How to avoid accidentally making your retirement account permanently taxable If you’re at or approaching retirement, you’ve got more to consider than just where to move your old plan. You’ll need to decide where your income is coming from, choose when to claim Social Security and Medicare, determine the right order to draw down your accounts, and much more.

Option 1: Don’t Touch a Thing If your employer’s plan allows it, you may be able to leave your account where it is, though you won’t be able to continue making contributions to it. However, you’ll be stuck dealing with whatever limited service is offered to ex-employees.

PROS: If you retire after age 55, you may not owe a 10% tax penalty on withdrawals. If you own considerable company stock, you might qualify for a favorable tax break (called Net Unrealized Appreciation). You may have access to plan loans. You may qualify for federal creditor protection.

CONS: You may end up with a trail of old accounts gathering dust. Not all employers will allow you to leave your plan (it may depend on the size of the balance). Plan fees may increase without your knowledge. You may have limited withdrawal options. Investment options are limited to the standard options currently offered to employees. Your investments may not be optimized for taxes or your overall financial goals.

How to Execute: Contact your previous plan administrator and ask to leave the plan in place.

Option 2: Move it to Your New Employer If you’re still working, a new employer might allow you to simply transfer your old account balance to the plan they offer their employees. Not all employers allow you to do it, but it’s worth asking about.

PROS: You’ll have your employer plans in one place. You won’t pay taxes on the distribution if you transfer directly. You’ll have the protections and benefits of the current plan.

CONS: Your new employer may not allow you to transfer your old account. You’ll be limited to the investment options offered by the new plan. Many employers will require you to wait to become eligible to enroll in the new plan.

How to Execute: Contact the HR department at your new employer and ask them to put you in touch with the plan administrator. If the transfer is possible, they’ll give you instructions on how to complete the move.

Option 3: Raid the Piggy Bank (Cash It Out) You have the right to cash out your old employer plan and take a check. This is probably your worst move because the financial repercussions are serious (and permanent).

PROS: You’ll get immediate cash.

CONS: You’ll owe income taxes on the account value. Your employer may automatically withhold 20% for taxes. You’ll owe penalties if you’re under age 591/2 (unless you qualify for an exemption). You’ll do permanent damage to your long-term goals.

How to Execute: Contact your previous plan administrator and ask them to liquidate the account and send you a check.

“Moving your old plan into an IRA gives you the most control over your money (including advanced ways to optimize your taxes), but there are two basic ways to do it.”

Option 4: The Not-So-Simple Indirect IRA Rollover You have the option to take a check from your old plan and roll it over into an IRA within 60 days. Some people like the idea of having a free 60-day loan, but indirect rollovers are fraught with potential (and expensive) mistakes.

PROS: You’ll get immediate access to the cash for 60 days. When the rollover is completed, you’ll get the benefits of an IRA, including:

• Access to many investment options

• Tax optimization strategies (including Roth conversions, backdoor Roth IRAs, etc.)

• Investment optimization for your overall financial picture

CONS: You have to manually take the check and remember to deposit it into your IRA. Indirect rollovers get reported to the IRS. If you fail to roll the funds over within 60 days, you may owe taxes and potential penalties. You risk making your retirement funds fully taxable forever. You risk losing out on any market gains that happen within your rollover window. Your employer may automatically withhold 20% for taxes (and you’ll have to make up the amount from other funds). Your new IRA might have higher fees than the old plan (we can help you evaluate them). While you may be allowed to take penalty-free withdrawals from an employer plan after age 55, you typically can’t withdraw penalty-free from an IRA until age 591/2. Typically, assets in an employer retirement plan have greater protection from creditors than assets held in an IRA. Once you reach age 72, you’ll need to take Required Minimum Distributions (RMDs) from both employer plans and IRAs. However, if you continue to work past age 72, you generally aren’t required to take RMDs from your current employer’s plan.

How to Execute: Contact your previous plan administrator and ask them to liquidate the account and send you a check. You’ll have to send the check to your new IRA custodian (and have it deposited) within 60 days, unless you qualify for a limited exemption to the 60-day rule.

Option 5: Direct Rollover to an IRA Directly rolling over your account assets to an IRA is a seamless process that avoids all the limits placed on rollovers by the IRS. It gives you all the benefits of your own, personalized IRA without the pitfalls of an indirect rollover.

PROS: You’ll get the benefits of an IRA, including:

• Access to many investment options

• Tax optimization strategies (including Roth conversions, backdoor Roth IRAs, etc.)

• Investment optimization for your overall financial picture You’ll avoid all potential IRS penalties by never taking “custody” of the money. You won’t owe taxes on the transfer. Your employer won’t withhold any amount from the balance for taxes.

CONS: You’ll have to do some paperwork (we can help). Your new IRA might have higher fees than the old plan (we can help you evaluate them). While you may be allowed to take penalty-free withdrawals from an employer plan after age 55, you typically can’t withdraw penalty-free from an IRA until age 591/2. Typically, assets in an employer retirement plan have greater protection from creditors than assets held in an IRA. Once you reach age 72, you’ll need to take Required Minimum Distributions (RMDs) from both employer plans and IRAs. However, if you continue to work past age 72, you generally aren’t required to take RMDs from your current employer’s plan.

How to Execute: Contact your previous plan administrator and ask them for a “direct rollover” to your IRA. They’ll give you the next steps they need you to take (such as giving them the name of your new IRA company)