Hey Guys

I finally got around setting up an official YouTube account for my blog and Facebook Fanpage.  Enjoy and I do appreciate any feedback.

Don’t forget to subscribe to my Channel here –> YouTube.com/401kRolloverOptions

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8 Page Guide Will Help You…

From Making The Wrong 401k Rollover Move!

Here’s your chance to get a copy of my guide to preventing 401k rollover and IRA rollover mistakes.

• 3 Best Case Scenarios for the best 401k rollover! (page 3)
• What You Should Do if You’re Between ages 55 and 59 1/2! (page 3)
• What 2 things you must not do when rolling over a 401k or IRA! (pages 5 & 6)
• Save thousands in taxes by understanding how NUA effects your rollover! (page 6)
• How do rollovers work with after tax dollars? (page 7)

Order & Download Your IRA and 401k Rollover Ebook Guide Today – Free

(simply click the download button and become a fan on FB to get instant access)

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I was just reading another blog about why it’s important to do a 401k rollover correctly via a direct transfer and not handle the transfer check yourself.

The blog said… “Another HUGE reason you don’t want your employer to hand you a check is that they must withhold 20% and deposit those taxes with IRS (just in case you never rollover the funds, IRS will have collected a big chunk of the tax money you will owe). Here’s an example. You have $100,000 in your company plan for your IRA rollover. You ask for a check. You employer sends you $80,000 and sends $20,000 to IRS. You have 60 days to deposit $100,000 into an IRA rollover account to avoid all taxes. So you must take $20,000 from your own pocket so that you’ll have the entire $100,000 to rollover. Yes, come tax time next year, IRS will return the $20,000 that your employer withheld.”

Yes folks that is true, if you don’t properly set up the 401k rollover;  you may have to pull monies out of your own savings to ensure the full 100% balance of the 401k is rolled over to your new IRA account.  Otherwise you get dinged and dinged big time depending on how much was in the 401k.  In summary, it’s better to have your401k funds be sent directly to your new custodial account.

What type of custodian account should you use and who should you go with?  Well that all depends on where you are at financially and what your horizon is for retirement.

Need Help Deferring Taxes on your 401k?

Ask Binh

Binh Nguyen

(832) 273-3392

admin@401krollovers.info

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Do 401k’s wear vests? = )

Not exactly… Before doing a 401k rollover you have to first determine how much of that former 401k will you be able to transfer and how much of it do you own.  Most companies that do any type of matching will have what is called a vesting schedule.

This schedule determines how much of the matching you can run off with.  If lets say your company has matched $10,000 towards your 401k and you are 100% vested, then feel free to take that $10,000. This is in addition to whatever else you currently have in your account to do your 401k rollover.  If you are only 25% vested then you can only take $2,500 of the matched contributions.

There’s usually two common types of vesting terms you should be familiar with.  One is “cliff vesting,” meaning you are fully vested after 3 years of service.  The other is “graded vesting,” which means just that.  In this case, you are vested by a percentage each year until you reach 100%.  So for example on a 20% per year; you’ll be fully vested by that 6th year of service.

Either way, I would never recommend staying with a company only because of their vesting schedule.  If it’s time for a career change; then by all means move on with your life and be happy for whatever contributions you were able to take.

Need Help Determining Your Vesting Schedule?

Ask Binh

Binh Nguyen

(832) 273-3392

admin@401krollovers.info

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Let’s say you did a great job of not having to dip into that IRA of yours and now you’re 70 1/2.  What next?  How much are you suppose to take out to satisfy your Required Minimum Distribution or RMD?

I’ll do my best to show you how to calculate your RMD.  The factor used in this calculation is based on the single life expectancy table.  That factor or number is what we’ll need and is also labeled “Distribution Period (in years)” on the previous post.

Let’s say Joe, has $150,000 still remaining in his individual retirement account.  Based on the previous RMD table, a 70 1/2 year old retiree has a 27.4 years of distribution factor that is used to calculate his required minimum distribution.  Grab your calculators folks… we just simply take that $150,000 and we divide it by 27.4 to get your RMD for that year.

(Drum-roll please)… my handy calculator spits out $5,474.45 as the magic number for that year.  So Joe, has to take out at least that much out of his IRA to satisfy his RMD for that year.  The more difficult question now would be, what will Joe do with his $5,474.45?  Should he go on a nice vacation with the wife or should he spend that hard earned money buying Christmas presents for the grand-kids?  I would say (C) let’s do both of the above!

I hope you find this helpful.  Please leave a comment or contact me with any questions or concerns.

Still Need Help With  Calculating Your RMD?

Ask Binh

Binh Nguyen

(832) 273-3392

admin@401krollovers.info

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