DRS - Free Rollover Report - February 2016

Is An IRA Rollover Right for me?

One Greentree Centre 10,000 Lincoln Drive East, Suite 201 Marlton, NJ 08053

1515 Market Street, Suite 1200 Philadelphia, PA 19102

P: 856.235.3830 F: 856.235.5871

www.DeCesareRetirement.com

Options For Your Retirement Plan When You Leave Your Employer Or Retire

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Copyright © 2016 DeCesare Retirement Specialists

FREE REPORT | Is An IRA Rollover Right For Me?


DeCesare Retirement Specialists P: 856.235.3830 | F: 856.235.5871 | [email protected] | www.DeCesareRetirement.com 1

Is An IRA Rollover Right for Me? Options For Your Retirement Plan When You Leave Your Employer Or Retire

As retirement approaches and you prepare for your Retirement Lifestyle, money decisions become increasingly important. You may be looking for impartial advice to help ensure that you don't outlive your money. One big decision centers on what to do with the money in your company retirement plan. For most people, the most attractive option is an IRA rollover. In other words, you transfer the money from your 401(k), 403(b) or 457 plan into a Rollover IRA.

OPTION #1 – LEAVING YOUR MONEY IN THE CURRENT PLAN Your first option, to leave the money in the plan, has its pros and cons. The pros include having a limited number of investment choices, creditor protection at both the federal and state levels, and the ability to take distributions from the plan without penalty if you leave your job at age 55 or older. The cons include a limited number of investment choices, higher plan costs, and inattentive management. Having a limited number of investment choices may sound appealing in a financial world with tens of thousands of investment options; however, knowing who decided on those options, why they decided on those choices and how they came to that decision is key. Typically, an investment committee has decided what options to include in the plan based on certain performance measures and allocation objectives. Understanding their process and getting to know their motivation can be extremely difficult especially in a larger corporation. Key questions to ask are:

• How do they know they are the best choices for me?

• How can they know those choices will accomplish my goals?

• Doesn’t the term "past performance not indicative of future results" apply? Without answers to these simple questions, it would be hard to put faith in those choices.

When you leave a company, you usually have three options with your retirement plan:

1. You can leave the money in the plan, 2. You can roll it over into a new plan (if you elect to keep working for a new employer), or 3. You can do a direct rollover into a Rollover IRA.




Special consideration that may affect your decisions: Bankruptcy If bankruptcy or other financial woes are present in your life, leaving your retirement account in your company plan could be a wise decision because of the extended protection offered by these plans. If that is not your experience, then this benefit may not have meaning to you. Leaving the Workforce Early If you have decided to leave the workforce early, before the typical 59 1/2 age imposed by IRA law for regular distributions, and have amassed a nice sum of money to fund your early retirement, then keeping your retirement account in your company plan will allow you to draw money out at the age of 55. This could prove to be a useful tool to those employees laid off early from a long career with one company and have amassed a healthy sum of money in their company plan. The flexibility provided by the company plan in terms of withdrawals is a greater benefit than currently offered in an IRA. Transparency In our current environment, transparency is en vogue: however your company retirement plan is behind the curve. Here's why. While current debate is ongoing to change the laws associated with company sponsored retirement plans, most employees, let alone management, do not understand the costs weighing down their plan. Fees and costs are not required to be completely transparent even to management, so for the employee it would be impossible to understand the true cost of your investment. Revenue sharing and “pay to play” fees have diminished the credibility, the success, and appeal of the retirement plan. This reason is reason enough to grab hold of your retirement account and perform an IRA Rollover. It comes down to this: Truly understanding the costs of your investments and taking control will assist you in achieving your retirement goals. OPTION #2 – Rolling your plan over into a new plan (If you elect to keep working for a new employer) Your second option, roll your money into a new plan with your new employer also has its pros and cons. The pros are the same as your existing account: a limited number of investment choices, creditor protection at both the federal and state levels, and the ability to take distributions from the plan without penalty if you leave your job at age 55 or older. The cons also include a limited number of investment choices in addition to higher plan costs and inattentive management. Moving on to option 3, a Rollover IRA may open your eyes and help you realize that flexibility, portability and transparency can be important advantages for you.




OPTION #3 - do a direct rollover into an ira

So how does it work? First off, a direct rollover is not the same thing as a direct payment to you. Yes, your employer can actually write you a check for the full amount of your 401(k) account, but 20% of that money will be withheld for taxes. Do you want to avoid that 20% withholding? A direct rollover is the solution. It is a “trustee to trustee” rollover, which works like this: your employer writes a lump sum check not to you, but in the name of the trustee or custodian of the Rollover IRA that you are creating to hold the funds. You then let your company’s retirement plan administrator know that you’ll be doing a direct rollover. (There is almost always a form to be filled out, on which you can state the specific instructions for the distribution check.) Your company sends you the check payable to the Rollover IRA trustee, with no withholding, and you have 60 days to deposit it in the Rollover IRA; day 1 is the day after you get the check. If you don’t complete the direct rollover in 60 days, you will pay taxes on the entire amount. (There’s no grace period for weekends or holidays.) Sometimes a wire transfer of assets occurs instead, between one investment custodian and another, which is the preferred “hands off” method so that if something goes awry, it can be resolved between the companies quickly and easily. Important Note: If you want to leave work before age 59 1/2 or you own shares of company stock, you should consider the tax implications created by those circumstances before attempting any kind of rollover.

What you can and can’t do

• You can make unlimited direct rollovers of your retirement account assets,

• You can add the money in your retirement plan to an IRA you already have, if you don’t intend to go back to work and put those assets into a new employer plan.

• Once your retirement plan assets are in an IRA, you can invest them practically in any way you choose – in

mutual funds, CDs, stocks, money market funds, annuities, and even more possibilities.

• You can also set up your IRA to make systematic payments to you.

• You cannot roll over the assets from your retirement plan directly into a Roth IRA. You have to put them in a Traditional IRA first, and then convert to a Roth IRA by paying tax on the assets you want to convert before you can realize that tax-free growth.

What is the smart answer for you? That depends on your particular situation and your goals and desires. Besides, there are many different types of IRAs. Is a Roth IRA, a stretch IRA, a traditional IRA, or another type of IRA appropriate for you? Again, your situation will determine the answer.




Discovering A Suitable Solution For You

The six steps of Comprehensive Lifestyle Planning can help you put together all pieces of the puzzle. The steps in the process are:

1. Defining Your Relationship We agree on how decisions will be made and which responsibilities each of us will have. Also, we spell out our fees up front. 2. Finding Out About Your Goals These take in your personal as well as your financial goals. Do you love to travel or play golf or care for your grandchildren? Another vital question is: What is the legacy you would like to leave your children and grandchildren? 3. Analyzing And Evaluating Your Current Financial Situation This is an important step before considering how we can meet your goals. Here we also address taxes and, if indicated, call in a CPA. 4. Developing Lifestyle Planning Recommendations Our recommendations meet your unique goals and priorities. They aim to be solid for the long term, even through a volatile economic climate. After hearing your comments and concerns, we revise the recommendations. 5. Implementing Your Lifestyle Plan Together we agree on a course of action. We coordinate the plan with any essential professionals such as an estate attorney or accountant. 6. Monitoring Your Comprehensive Lifestyle Plan Recommendations We meet regularly and modify the recommendations as the financial climate adjusts or as your life changes.




ABOUT STEVE DECESARE Certified Financial Planner™ and President of DeCesare Retirement Specialists Philadelphia’s leading retirement transition specialist, Steve DeCesare, CFP®, is a second-generation financial planner who has spent the last decade of his career helping professionals transition into retirement with financial confidence. His multi-disciplinary planning approach works to ensure that the investment, income, tax and estate strategies are in place to achieve each of his client’s financial and lifestyle goals for retirement. Steve specializes in offering guidance to corporate employees regarding their company sponsored retirement plans such as 401(k)s and pensions. He also advises on rollovers to and investment decisions within Individual Retirement Accounts (IRAs). Additionally, he helps employees who are facing workplace transition with the critical decisions and financial plan adjustments that need to be made to help ensure a smooth progression of their financial life as they enter into their next job or retirement. Steve is a CERTIFIED FINANCIAL PLANNER™ professional and Investment Advisor Representative of DeCesare Retirement Specialists a Registered Investment Advisor, a Registered Representative under Triad Advisors. He is also life and health insurance licensed in the states of New Jersey and Pennsylvania. Steve is a member of the Financial Planning Association (FPA) and a recipient of the 2012, 2013, 2014 and 2015 Five Star Wealth Manager Award. As a financial resource, Steve has been quoted in numerous media outlets including USA Today, Money, The Washington Post and Bankrate.com. We invite you to call DeCesare Retirement Specialists at 856.235.3830 to schedule a no-obligation, complimentary consultation to explore options for your current retirement plan.

Securities offered through Triad Advisors, Inc. Member FINRA/SIPC. Advisory Services offered through DeCesare Retirement Specialists dba Steve DeCesare, Ltd.

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One Greentree Centre 10,000 Lincoln Drive East, Suite 201 Marlton, NJ 08053

1515 Market Street, Suite 1200 Philadelphia, PA 19102

P: 856.235.3830 F: 856.235.5871

www.DeCesareRetirement.com

sdecesare

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Copyright © 2016 DeCesare Retirement Specialists

DRS - Free Rollover Report - February 2016

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