Individual Retirement Accounts (IRAs)
Rollover IRA's

When it comes time to cash in your employer-sponsored retirement plan, moving your nest egg to a rollover IRA may be one of the most versatile options.  You can avoid the potential for thousands of dollars in taxes and penalties by "rolling it over" directly into an IRA, where it will continue to grow tax-deferred until withdrawn.*

The Rollover Advantage

• Save money.  Previous employers must allow you to keep your money in their plans if your balance is $5,000 or more, but they may charge you higher administrative fees than current employees pay.
• Manage your portfolio more easily.  Rebalancing your portfolio to maintain its original asset allocation is simpler when all your assets are in one account.
• See your portfolio on one statement.  There’s less paperwork to deal with when you consolidate accounts.

Flexibility

There are two ways roll over your plan balance into an IRA:

1. Take the distribution yourself.
   
   However, if the check is made out to you, your former employer is required to withhold 20% for federal income taxes.  If you don’t roll over the entire balance – which means coming up with the 20% withheld in addition to the amount paid to you – to an IRA within 60 days, it will be considered a taxable distribution.  You’ll owe income taxes on the full amount of the distribution, at rates as high as 35%.  In addition, if you are younger than age 55, you may pay a 10% tax penalty.
   
   
2. Arrange for a direct or trustee-to-trustee rollover to an IRA. 
   
   By rolling over your plan directly into an IRA, you:
   
   
   • Avoid the temptation to use the money for something other than retirement savings.
   • Keep your money growing tax-deferred.
   • Avoid a taxable distribution and potential penalties.
     

Get started today by contacting a First National Investments & Planning representative at 402.633.3704 or 888.916.8378 ext. 3704, visit a branch near you, or send us an email.