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This article brought to you courtesy of Matt Stutes, CFP, of Cornerstone Wealth Management, Canby Herald Financial Planning Insider Expert.

Matt Stutes, CFP

Your retirement plan may offer you several options for managing your plan assets when you change jobs or retire. Understanding these choices will help you narrow down your choices. Note that these selections apply to your contributions, the vested portion of your employer's contributions, if any, and the earnings attributed to both.

• Keep your money in the plan. You may be able to leave your savings in your employer's retirement savings plan. Usually, annual required minimum distributions must begin after you reach age 72. You can no longer make contributions, you can still control how the money is invested.

• Roll over your money to another retirement account. You may move your money into an individual retirement account (IRA) or, if you are changing jobs, into your new employer's retirement plan, if permitted byyour new employer. With a "direct rollover," the money goes directly from your former employer's retirement plan to an IRA or to your new plan -- you never touch the money. This option also allows you to continue deferring taxes.

• Take a cash distribution. You can choose to have your money paid directly to you in a lump sum or in installments (if you are retiring). However, you will be subject to income taxes, and if you are younger than age 59½, a 10% additional tax. In addition, your employer will withhold 20% of your distribution to put toward

your federal income tax obligation.

Avoiding an Immediate Tax Bite

If you receive a distribution, you can avoid an immediate income tax bite and the penalty if you roll over the entire amount into an IRA or a qualified employer plan within 60 days. You will receive your distribution minus 20% in withholding for federal income tax, but you can make up the withdrawal amount from your own pocket. The withheld amount will be recognized as taxes paid when you file your regular income tax. Think carefully before making any decisions about the money in your retirement plan. It may also be a good idea to discuss your options with a tax advisor.

Cornerstone Wealth Management

486 N.W. 2nd Ave,

Canby, OR 97013

503-266-7431

www.thecwmgroup.com

Securities and advisory services offered through LPL

Financial, a registered investment advisor. Member

FINRA/SIPC.

The opinions voiced in this material are for general information

only and are not intended to provide specific

advice or recommendations for any individual.

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