Mistake #8 – Not Rolling 401(k) TSP or 403(b) Plans to an IRA
(Best used by having your clients or prospects read)
- 8th of 10 from the Book “Top 10 IRA Mistakes and How to avoid IRS Tax Traps”
- Stay tuned for “Mistake 9”
Participating in a company-sponsored 401(k) or 403(b) plan has long been viewed as the best game in town for two reasons:
1. Contributions were not taxed and are deducted directly from your paycheck, so you hardly miss the money.
2. Most plans offer company matching funds, some as high as 100% of the employee’s contribution. What could beat that? You double your money up front!
For many retired workers, their 401(k) plans represent the majority of their retirement savings, and for some, their 401(k) is worth more than their home. However, after retirement both reasons to remain in the 401(k) or 403(b) are gone forever. You can no longer make tax-deductible contributions and there are no longer company matching funds. Now is a good time to roll the 401(k) or 403(b) to a more flexible IRA and take control of your retirement savings.
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