New York Life 401k
New York Life is among the pioneers of 401(k) plans, having contributed industry-recommended solutions for the past 40 years. Consulting heritage and long industry standing are the two major reasons why the company has been considered a recognized industry player.
401(k) – What is it?
401(k) is an employer-sponsored retirement savings arrangement. It allows employees set aside and invest a portion of their paycheck prior tax deductions. The taxes are calculated and paid only once the sum for the 401(k) plan is saved. For employees about to retire, it’s important they have some clarity on what they’ll do with the retirement plan funds. Being aware of the distribution options and their impact on retirement savings could determine whether they are likely to have a pleasant retirement life or one filled with financial obstacles and complications.
There are several directions you can take with your 401(k) funds and New York Life has a few recommendations to make:
i) Direct IRA Rollover
With your entire plan getting directly rolled over into an IRA, you end up avoiding mandatory federal or state withholding taxes, and also a possible IRS penalty. Since the earnings being accumulated are not subjected to tax, your total funds would amass much quicker when compared to funds assorted in a taxable account.
ii) New Employer Plan Transfer
If your new employer is open to accepting rollovers from your previous plan, you can make direct funds transfer to the new employer’s 401(k) plan and save yourself withholding and income tax payments.
iii) Stick to the Previous Employer’s Plan
If you have not crossed the retirement age of 62, you have the option of keeping the funds in the previous employer’s plan. Under these circumstances, the funds would keep accumulating tax-deferred, which can be later moved to an IRA or another employer plan.
Despite rich industry experience, New York Life is not legally obliged to or accountable for the recommendations its make. For sound financial and legal knowledge, it’s recommended you get in touch with professionals.