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5 Options for Your Account When You Retire
5 Options for Your Account When You Retire
Distribution Options
You have many distribution options available to you when you retire. Review this chart of your five distribution options and then contact your financial professional to discuss which one might be best for your situation.
|
Options |
Benefits |
Considerations |
|
Roll over into a traditional IRA
|
• Invested assets remain tax-deferred • Avoid current taxes and a 10% early withdrawal penalty (when applicable) • Not subject to former employer’s plan restrictions • Flexible — wide selection of investment options • Assets may be consolidated into one account |
• May be appropriate if you are younger than 59½ years of age and want to avoid immediate taxes and penalties (if applicable) • May set up systematic withdrawals or take partial withdrawals from the IRA as needed |
|
Select a retirement income stream |
• Wide range of annuity income options • Flexibility to choose a payment method that best meets your needs • Income stream of specified payments |
• Interest rate is locked in at time of purchase • Once an annuity income option is selected, it cannot be changed • Anticipate future needs when selecting an annuity income option |
|
Keep assets in former employer’s plan |
• Invested assets remain tax-deferred • Avoid current taxes • Same ID/password to access your account online or via telephone |
• Limited to former plan’s investment options • May not be permitted by your former employer’s plan • May limit distribution options • Costs may be higher inside the plan |
|
Transfer assets to new employer’s plan
|
• Invested assets remain tax-deferred • Avoid current taxes • May offer investment options that your former plan does not |
• Subject to new employer’s plan restrictions • Limited to the investment options offered by your new employer • May not be permitted by your new employer • May have a waiting period before you can participate |
|
Lump sum cash distribution |
• Immediate account access, less any taxes, incurred penalties and loan payoffs • May invest in anything, although generally money will no longer be invested tax-deferred |
• If you need access to cash, consider a partial rollover to avoid paying taxes on the entire amount • Money withdrawn is subject to federal and state taxes • If you are under 59½ years of age, you may be assessed a 10% early withdrawal penalty • Plan assets must be rolled to another qualified plan within 60 days or retirement contributions are no longer tax deferred • Your former employer’s contract may assess withdrawal charges on cash distributions |
Notes:
Any investment involves risk and there is no assurance that the investment objective of any investment option will be achieved. Before investing, understand that variable annuities are subject to market risk, including possible loss of principal.
Group annuity contracts are issued by American United Life Insurance Company® (AUL) and registered variable annuity products are distributed by OneAmerica Securities, Inc., a Registered Investment Advisor, Member FINRA, SIPC, One American Square, Indianapolis, IN 46282, 1-877-285-3863. McCready and Keene, Inc. and OneAmerica Retirement Services LLC provide administrative and recordkeeping services and are not brokers/dealers or an investment advisors. Neither AUL, OneAmerica Securities, McCready and Keene, OneAmerica Retirement Services nor their representatives provide tax, legal or investment advice.
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