Look Before You Leap

It happens to most investors at one time or another. You've been at a job for a while, and you've wisely been contributing to their retirement plan. But now it's time to move on to a new job or into retirement. Wait! What about your retirement plan balance? Good question.

Know Your Options
You've just entered the maze of plan distributions. You have options, but also temptations. The options vary, but generally include rolling your balance over into another employer's plan or into an IRA, or cashing out with a distribution payable to you.

Weigh the Costs
Cashing out may be alluring. But it also may be expensive. Not only will you typically face some serious taxes, tax withholding, and a 10% penalty, you'll also forfeit that coveted tax–deferred growth. There are times when it might be appropriate ––such as if you need cash to start a business. But what appears brilliant today could look rather bleak at retirement.