Retiring or Leaving the Company

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Whether you are retiring or changing jobs, you need to know what to do with your employer sponsored retirement plan before your leave. Once you leave a job for whatever reason, you can choose to:

  • Rollover the money into an IRA.
  • Take the lump sum and pay the income tax and potential penalties.
  • Leave the money at the company if the company offers that as an option.
  • Rollover the money into your new employer’s plan, if that plan accepts rollovers.

Realize that the above are options offered by the IRS. However, your employer’s rules may be more restrictive and if so, there’s nothing you can do. For example, if you have a pension plan that offers payout options over your lifetime or jointly over the lifetimes of you and your spouse, but there is no option to rollover a lump sum to an IRA, than the rollover option isn’t available to you. In other words, the “summary plan document” rules. You may want to get a copy of that now and have your financial advisor review it so that you know what options you have.

So the starting point is to get the information from your employer’s plan as to the options available to you.

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