Archive for April, 2015

3 Reasons You May Want to Rollover Your Ex-Employer 401k to an IRA

Friday, April 10th, 2015

401k rollover to IRA

Do you have a 401k with an ex-employer? If so I am sure you have thought a time or two about whether you should rollover your 401k to an IRA. While there are many things that can play a role as to whether this is a good or bad choice for you here are a few reasons as to why you may want to rollover your 401k to an IRA.

Wide Selection

Many 401ks have restrictions on many of the investments that are available to you. For instance, many 401ks only allow for mutual fund investments. IRAs and self-directed IRAs allow for so many more investments. You can rollover your 401k monies into an IRA and invest in things like actual real estate, gold and private placements. If you aren’t so adventurous you can still invest into things like ETFs and hedge funds. Either way, when transferring from a 401k to an IRA or self-directed IRA you have more control over what happens with your funds, especially with a self-directed IRA.

Cost Savings

With an IRA you can find many cost saving benefits. For instance, ETFs are notorious for having low fund costs, especially compared to mutual funds. If you were to compare your 401k to most IRAs you are probably going to see higher fees with your 401k. So that may be reason enough to switch over but again, it depends on the current situation you have.

Penalty Free Withdrawals

While you can withdraw penalty free from a roth IRA it is not without its many restrictions and issues. According to the IRS rule 72t distribution you can get early withdrawals before 59.5 but once you elect to withdraw early you must continue withdrawing for five consecutive years or until you turn 59.5, whatever happens to be longer. That may be super steep depending on your age but it is still an option.

These are just a few of the reason why you may want to take your ex-employer 401k and roll it over to an IRA. Again, every situation is different and it is very important to talk to your tax attorney to make sure you are doing the best thing for your specific situation.

If you are thinking about doing a rollover from your 401k to a self-directed IRA we can help you. Remember, a self-directed IRA gives you all the benefits of an IRA but also gives you much more control and more investing potential. Tangible investments that are outside the stock market are all possible through a self-directed IRA.


Circumstances That Allow For Early Withdrawal From Your IRA Without Penalty

Tuesday, April 7th, 2015

Account Withdrawal

Normally when you withdrawal from your IRA before you turn 59 1/2 then you will incur a 10 percent withdrawal penalty along with income tax on the amount withdrawn. There are only a select few circumstances that allow for withdrawals that do not incur a penalty. I do want you to be aware that while there are circumstances that may allow for individuals to withdraw IRA monies without penalties it doesn’t mean that it is the best option. Make sure if you fall into one of these circumstances that this really is the best option for you.

At Accuplan Benefits Services if for whatever reason you need to withdrawal from your IRA please fill out the withdrawal form and make sure you check the appropriate withdrawal reason.

The following are a few of circumstances where individuals may withdraw IRA monies without penalty:

A First Home Purchase

First time home buyers can penalty free take an IRA distribution of up to $10,000 or $20,000 for couples to be used as a down payment on your first home purchase. It is considered a first home purchase if you haven’t owned a home within the past two years.

College Costs

Looking to pay for college for you, a spouse, a child or grandchild? You can pay for tuition, fees, books and other supplies required for attendance. You may be able to pay for room and board as long as you are at least a half time student. One thing to note is that it does count as taxable income and could hurt the student from receiving federal financial aid.

Medical Expenses

Any non reimbursable medical payments that exceed 10% of your adjusted gross income can be paid by funds from your IRA monies. The distribution from your IRA has to be in the same year as the medical expense.

Health Insurance

If you are unemployed you can take a withdrawal penalty free from your IRA to pay for health insurance for you, your spouse or any dependents. In order to qualify you must receive unemployment compensation for 12 consecutive weeks and the distribution must be in the year or following year that you received the compensation and no later than 60 days from being reemployed.


If you are disabled to the point you cannot participate in gainful activity due to a physical or mental condition you can qualify for exemption to the early withdrawal penalty. You will need to show proof of this by having a doctor determine that your condition is as such and looks to be such for the long future.

These are a few of the ways that you may withdrawal from your IRA without having to pay an early withdrawal penalty. You still need to make sure you actually qualify for these. Each situation is different and could affect your ability to qualify for these exemptions. As a strong reminder, just because you may qualify for these exemptions doesn’t mean it is the best option for you. That means you need to do your own homework to make sure you are doing the best thing for you and your situation. You may need to even chat with a CPA or tax attorney to make sure you are doing what is best for you.


What Are Your Retirement Account Options?

Friday, April 3rd, 2015

Retirement Accounts

There are multiple options for those trying to secure a more secure retirement income. The most common types of retirement accounts for those looking to help secure a more stable retirement income are the following:

Tax Deferred Accounts

Tax deferred accounts are one of the most common types of retirement accounts. This includes 401k’s and traditional IRAs. One thing to remember is that all withdrawals from these types of accounts are taxed just like normal income.

Taxable Accounts

These are normal investment accounts. The profits from these investments are taxed at the capital-gains rates. This will vary depending on how long you have owned the investments and what your tax bracket is.

Roth IRAs

This is another popular retirement account. Withdrawals from a roth IRA are all tax-free as long as it has been open for five years or more and you are 59 1/2 years or older. Depending on your situation one potentially benefit is that you don’t have to take required minimum distributions (RMDs) when you turn 70 1/2.

Social Security

While this account can provide a decent steady income it also shouldn’t be relied upon because rarely do these provide enough income for you survive. Another thing to note is that social security can be taxed depending on provisional income.


Annuities can be a great way to secure retirement income but they aren’t for everyone. One thing that may sway you is how risky you want to be in retirement. If you are ok with a little more risk you could be better of without an annuity and investing in stocks and bonds. With more risk can come more reward but remember you could easily lose what you invested as well.


Pensions are payments from the government or private companies. These are typically taxable at your regular income rate.

Saving Accounts/CDs/Money Market

These are not really retirement accounts but sadly there are many of you who use them as such. Those of you who sadly haven’t taken advantage of the above mentioned retirement accounts you need to realize that saving accounts/CDs/money market interest and dividends are taxed at your normal income rate.

These are the most popular retirement accounts that are available to those looking for a way to better their retirement income. While all of these types of accounts are available to you it doesn’t mean you have access to every one. For example, you may not have access to a 401k if your work doesn’t provide one. Also, depending on your job you probably don’t have access to a pension. So what does this mean for you?

It means that you should look into your own situation and find what is available to you. While each of these retirement accounts has its own issues depending on your situation they are also better than not doing anything.

If you are already using these accounts and are looking for more then check out some of my other articles talking about self-directed accounts.

Hopefully you are able to gleam some useful information from this. If you have questions about what is the best option for you and your situation I would chat with your accountant or