401K’s are a vital part of any successful retirement plan. Put simply; a 401K is a qualified retirement plan, sponsored by an employer that allows you to put aside a percentage of your monthly income on a tax deferred basis.
There are several options that should be considered such as a 401K rollover, this involves moving your existing balance without incurring any tax or penalty payments to your new employees 401(k) plan.
You may also choose to transfer your cash into an Individual Retirement Account (IRA) which can provide wider investment freedom and greater income flexibility during retirement.
Each option has different costs and expenses associated with the choice and there are advantages and disadvantages to moving or rolling over a 401k plan. No guarantees of investment success are offered.
Due to a lack of understanding, the default choice for many is to leave their 401(k) where it is. Each 401(k) plan is run by the company who sponsors it, as such they decide things such as which investment options are available.
If your new employer offers a 401(k) and you are eligible to participate, it’s simple to roll over your old 401(k).
If you are over 59½, you can start taking qualified distributions from any 401(k). If you have a traditional 401(k), any income you take will be included in your annual tax allowance.
By moving your 401(k) to an Individual Retirement Account (IRA for short) you can access wider investment choice often at a lower cost. An IRA also facilitates greater flexibility for withdrawals meaning you can choose as and when to drawdown throughout your retirement.
At Skybound we know that making a decision on what to do with your 401K can be daunting, which is why our team of experienced Advisors are on hand to help you answer the questions most British internationals are asking.
All of our advisors are US licensed Advisory Representatives, meaning they are well placed to advise in all areas of personal financial planning including 401K's.
As the process is a largely digital transfer with minimal paperwork involved, there is no cost involved. However, there are costs for our management services in the form of an annual fee will be deducted from your account on a quarterly basis and will reduce the overall performance of your account.
Once we have located your 401(k) and have all the required information, typically the process takes between 2 to 3 weeks to complete.
There is no minimum contribution required with a 401(k). However, to maximise your 401(k) return there are suggested amounts that should be contributed.
Like any investment vehicle, the value of your 401(k) can go up and down. When the Global Credit Crisis took hold in 2008, many 401(k) plans that were heavily linked to the stock market suffered huge losses. As with any investment plan, the key to minimising the effect of market swings is to ensure your money is spread across a number of asset classes rather than placing all your eggs in on basket.
Your first port of call should be to contact your old employer directly. However, if you don’t hold contact information for them, or they have been subject to a corporate merger this might not be an option. In this case, you will need to search for an old statement for contact details of the plan administrator. Alternatively, you can use the National Registry of Unclaimed Retirement Benefits to conduct a free search for any retirement plan balances held in your name.
You can reach us directly by calling us between the hours of 8:30am and 5pm at each of our respective offices and we will immediately assist you.
Investing involves risk including the loss of principal. No guarantees of investment performance are offered. Your account values will fluctuate and there will be periods involving negative returns. Investing requires a long term time horizon.
The advice provided by Skybound Wealth Management USA, LLC is provided through a registered investment adviser tailored to suit your individual circumstances and risk appetite. Registration as an investment adviser does not imply a certain level of skill or training.
Skybound Wealth Management LLC is part of the Skybound Wealth Management Group, for all Group regulatory details please visit our regulations page.
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