How to do – Pension Rollover to IRA

by IRA Rollover in Gold IRA, Retirement with Comments Off on How to do – Pension Rollover to IRA

It’s not hard to do a pension rollover to IRA and there are many reasons why you should do so.

One of the most important reasons for pension rollover to IRA is the instability of the economy.  Pension are paid by the company you work for and with the volatility of the economic climate combined with a low GDP and consumer fears, many companies are suffering financially.  Your pension is a promise from the people you work for that they will pay you a monthly stipend after you retire but how do you know they will be able to keep that promise?  If a mega-monster corporation like GM can fail so can your company and it can take your hard-earned pension with it.

Retirement pension

One advantage of a pension rollover to IRA is that you are in control of the money and how it grows.  You can invest it any way you wish.  Remember how many employees of Enron lost their entire pensions when their fund administrators invested their money in company stocks?  You’ll be in control of your retirement funds and can leave it up to your broker or take a hand in some or all of the decisions.  You can even invest in precious metals if you like in order to have more stability.

There are two things you can do with your pension—roll it over to a traditional IRA or a Roth.  If you want to pay taxes now and avoid possibly higher taxes later you can choose a Roth.  A traditional IRA will give you tax deductions now and you’ll pay taxes as you withdraw the money.

You must ask for a transfer from the pension plan’s administrator then fill it out and wait for it to be processed.  Start the process of opening your choice of IRA while you’re waiting.  After your pension is cashed out the administrator will send it to you minus about 20% for taxes then you have 60 days in which to deposit it into your new IRA account.  Be sure that your administrator has your pension set up so that as it accrues in the future, it is deposited into your IRA.

It is very important to deposit your pension in your new IRA within the 60 day window.  If not, you’ll have to pay income tax on it even if you deposit it on the 61st day.

It’s not a complicated process to convert your pension to an IRA and can make a huge difference in the kind of lifestyle you have to look forward to in retirement.  Doing a pension rollover to IRA can help make your golden years stress free and financially stable.

Did you enjoy this article? Share it!
  • no image available
  • no image available
  • no image available
  • no image available
  • no image available

Sorry, comments for this entry are closed at this time.