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Why Rollover Your 401(k)?

As you’re managing your retirement savings, there’s a lot to consider – especially when transitioning between jobs or planning for the future. A 401(k) rollover can provide you with greater control over your retirement savings and offer a range of benefits, including:

Consolidation

Simplify your retirement portfolio by consolidating multiple 401(k) accounts from previous employers into one manageable account. This means fewer things to track and a more streamlined financial set-up.

Investment Flexibility

Get access to a wider range of investment options that better align with your financial goals and risk tolerance levels.

Lower Fees

Reduce administrative fees and potentially access lower-cost investment options, which can help maximize your retirement savings over time.

Personalized Guidance

Receive personalized advice from our team of Tucson fiduciary financial advisors who can help you make informed decisions about your retirement savings strategies.

Why Choose Trajan Wealth?

At Trajan Wealth, we prioritize your financial well-being. Here’s why our clients trust us with their 401(k) rollovers in Tucson:

  1. Local Expertise: As a local financial firm serving Tucson, AZ, we have a deep understanding of local market dynamics and can tailor our services to meet your specific needs.
  2. Holistic Approach: We take a holistic approach to financial planning, considering your unique circumstances, goals, and aspirations to develop a comprehensive retirement strategy designed just for you.
  3. Transparent Communication: We will always keep you informed every step of the way. You deserve a clear understanding of your options and the potential outcomes.
  4. Commitment to Excellence: With years of industry experience and a longstanding commitment to excellence, our Tucson fiduciary advisors are dedicated to helping you achieve financial success and peace of mind in retirement.

Cashing Out Your 401(k):
What You Need to Know

Before you cash out your 401(k), it’s important to understand how that may impact your financial planning. Here are a few elements to consider:

  • Tax Implications:
    If you cash out your 401(k) before retirement age (typically 59.5), you’ll most likely have immediate tax consequences. This is because the amount you withdraw is categorized as ordinary income and therefore may be subject to federal income tax, state income tax (if applicable), and even a potential 10% early withdrawal penalty. This penalty is designed to discourage premature withdrawals and can significantly reduce how much of your own money you receive.
  • Impact on Retirement Savings:
    Opting to cash out can significantly reduce your retirement funds and directly impact your long-term financial stability. Withdrawn funds lose out on future growth and compounding, dealing a significant blow to the development of your retirement nest egg.
  • Loss of Employer Contributions:
    If your employer has matching contributions, employer-provided benefits, or incentives associated with your 401(k), you may lose these funds if you cash out your account.

Certain situations (i.e., financial hardship, unexpected medical expenses) can sometimes make cashing out the only viable option. However, before doing so, look at other options, including rolling over funds into an IRA or another employer-sponsored retirement plan. Rollovers mean you can keep the tax-advantaged status of your retirement savings and continue investing!

Cashing out a 401(k) should be considered only after exploring all other alternatives. Before you move forward, understand the tax implications, penalties, and long-term impact on your retirement savings. If you want professional recommendations, our team can look through your financial situation and offer advice that aligns with your circumstances and financial goals.

How Trajan Wealth’s Tucson Fiduciary Advisors Help

When you choose Trajan Wealth for your 401(k) rollover needs, you can expect a seamless and hassle-free experience:

  1. Initial Consultation. Depending on your preference, we’ll start by understanding your financial goals, retirement timeline, and current 401(k) plan details with an in-person or virtual meeting.
  2. Customized Recommendations. Based on your unique situation, we’ll provide personalized recommendations for your rollover, considering factors such as investment preferences, risk tolerance, and tax implications.
  3. Implementation: Once you’re comfortable with the proposed strategy, we’ll handle all the necessary paperwork and logistics while we facilitate the transfer of your 401(k) funds into an IRA, or another new retirement account.
  4. Ongoing Support. Our relationship doesn’t end after the rollover is complete! We’ll continue to monitor your retirement portfolio, provide regular performance updates, and offer guidance as needed to help you stay on track toward your goals.

Our approach to a worry-free 401(k) rollover process

401(k) Rollovers in Tucson:
FAQs

 

A 401(k) rollover is the process of transferring funds from a previous employer’s retirement plan, such as a 401(k) or 403(b), into another retirement account, typically an Individual Retirement Account (IRA) or a new employer’s retirement plan.

For Tucson residents, the process works similarly to anywhere else in the United States. You can initiate a rollover to consolidate retirement savings, gain more investment options, or maintain tax-deferred growth.

Generally, if done correctly, a direct rollover from one qualified retirement account to another doesn’t trigger taxes or penalties. However, if you withdraw funds from your 401(k) and don’t roll them over within 60 days, it could be subject to income tax and a possible early withdrawal penalty if you’re under 59½ years old.

It depends on your current employer’s plan rules. Some employers allow incoming rollovers, while others don’t. Check with your HR department or plan administrator to see if it’s an option.

Besides rolling over into an IRA or a new employer’s plan, you could leave the money where it is (if your former employer allows it), cash out (though this usually isn’t recommended due to taxes and penalties) or convert it to a Roth IRA (which has tax implications).

To initiate a rollover, contact us to see how we can help. We’ll typically assist you in completing the necessary paperwork, which often includes forms to authorize the transfer and specify where you want the funds to go.

It’s generally a good idea to consult with a Tucson financial advisor, especially when dealing with significant financial decisions (like a 401(k) rollover). We can provide personalized advice based on your retirement goals.

Solidify Your Retirement Plans in Tucson, Arizona

Trust Trajan Wealth to help safeguard your future and work to unlock the full potential of your retirement savings in Tucson. We’re here to help you navigate the complexities of retirement planning and build a brighter financial future together.

Tucson, Arizona

3567 E Sunrise Dr, Suite 133
Tucson, Arizona 85718

Tucson

We also offer virtual appointments if that’s more convenient! Contact our Tucson team to schedule a consultation.