Retirement Plan Tips for Job Changers

PR Log (Press Release) – Nov 20, 2008 – Media Contact:
Cindy Stranad
919.232.5008
Cindy@articulon.com


RALEIGH, N.C. (November 18, 2008)—With an unsteady economy and rising unemployment rates —up 1.4 percent in the last 12 months, according to the U.S. Department of Labor—many Americans are changing jobs and facing decisions on what to do with money invested in 401(k) plans. W. Landon Watts, a financial advisor for Raleigh-based Banyan Rock & Talent, believes this transitional period creates an opportunity for individuals to evaluate their long-term financial plans.

“What individuals do with 401(k) assets when changing jobs can be one of the most important financial decisions they make,” says Watts. “The best thing they can do is take time to look over all of their options before making a decision.”

To help individuals make the best choice with their assets, Watts offers advantages and drawbacks to four options available:

Stay invested in previous employer’s plan
Depending on the plan, individuals may or may not have this option. The existence of after-tax contributions may be a compelling reason to stay in a previous employer’s plan, since these can continue to grow tax deferred as long as they are kept in the plan. A second reason to stay with this option is satisfaction with investment performance, as the same investment options might not be available in a new plan. On the down side, certain privileges enjoyed as an employee may be lost, making access to these assets more difficult in the event of an emergency.

Roll assets into another qualified plan or IRA
This option offers the most investment flexibility and the least exposure to taxes and penalties. Individuals should request a distribution check made out to the trustee of the new plan or IRA. As long as the originating 401(k) does not contain a mixture of pre-tax salary deductions and post-tax contributions, the entire balance can be rolled into a new plan or IRA—tax free.

Invest assets in new employer’s plan
Doing this ensures that all retirement assets are held in a centralized location and remain tax deferred. One drawback is that new employers may not allow individuals to participate in the new plan right away. Also, after-tax contributions in a previous employer’s plan may not be eligible for transfer into the new plan.

Take a cash distribution
Individuals should be aware of penalties assessed when choosing this option and think of what will be lost by taking the cash. When a distribution is not directly rolled over into an IRA or other qualified plan, employers automatically withhold 20 percent of the money for federal taxes. In addition, if investors are younger than 59 ½, a 10 percent federal tax penalty is added on. Taxpayers in the 28 percent bracket or greater will also have at least an additional 8 percent taken from the distribution.

For more information, visit www.LandonWatts.comor call (919) 816-2591.

About W. Landon Watts:
W. Landon Watts specializes in wealth strategy solutions for individuals, corporations and institutions, focusing on retirement and insurance planning in both the non-profit and for-profit sectors. Watts joined Banyan Rock & Talent in 1997. He currently holds an Investment Company and Variable Contract license, as well as a Life and Health Insurance license. Though not a CPA, Watts and Banyan Rock & Talent wealth strategists work within specific legal parameters to indicate tax-advantage opportunities that clients along with their accountants can utilize. Watts understands everyone has different goals, risk tolerances and objectives; he enjoys customizing each portfolio for his clients. Watts received a Bachelor of Science degree from Appalachian State University in 1993. He is licensed to conduct business in Florida, Indiana, North Carolina, South Carolina and Virginia. Visit www.LandonWatts.com for more information, or call (919) 782-0033.
 
Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.

Information discussed in this release is reproduced with permission of MFS and its Heritage Planning newsletter.

About Banyan Rock & Talent:
Based in Raleigh, Banyan Rock & Talent is a collaboration of registered reps with FSC Securities Corporation. Founded in 1986, the company holds the philosophy that strength, growth and the diversification of their client’s hard-earned money is made possible through knowledge, diligence and years of experience. Banyan Rock & Talent specializes in areas including stocks, bonds, mutual funds, variable annuities, retirement strategies, market timers, life insurance, disability insurance and applied real estate. All strategists are registered representatives offering securities through FSC Securities Corporation, a registered broker-dealer, and member of FINRA/SIPC. For further information, visit 3356 Six Forks Road Raleigh, NC 27609, or call (919) 782-0033.

Securities and Advisory Services offered through FSC Securities Corporation, Member FINRA/SIPC. Banyan, Rock & Talent is not affiliated with FSC Securities Corporation or registered as a broker/dealer or investment advisor.