6-18-2016 1-16-24 PMWe all know that successful entrepreneurs are highly motivated people, prized as job creators in our communities and respected for their drive, hard work, and practical know-how. Among the many rewards of being a successful business owner – along with all the responsibilities — is the ability to provide a desirable life-style for family, including educational, social and financial opportunities for children that might not be possible without the resources the business provides. In other words, success in business presents an opportunity to leave a legacy. It seems surprising at first glance, then, that practical and successful business owners often find themselves at a critical juncture in their lives and business careers with no plan in place to preserve the financial engine of that legacy, the business itself. Not only is the legacy imperiled by lack of professional planning, but so might any future business income that may be counted on by the owner during his or her retirement years.

Unfortunately, instead of having a well-thought-out plan to keep the business viable despite the impact of predictable life events such as retirement or passing away, or even unpredictable ones, such as incurring a disability, some owners find themselves trying to patch together a plan at the wrong time – when they are under pressure to do so. Up until that time, the business owner – and perhaps his or her partner(s) — may be engaged in “fantasy planning.” In other words, they have an idea about the future of the business, but yet have nothing appropriate on paper. Real succession planning needs to be robust. It requires candid discussions with partners, senior employees and family members, as well as implementation assistance from financial and legal professionals. There may be some costs involved, but any cost is likely to be minimal relative to the stakes that are involved. Effective succession planning means the business goes on after you leave it, and that you and your family can benefit financially from it because it continues to be profitable and well managed.

Deciding on someone to succeed you can entail discussions with a partner or partners, with senior employees, with family members, or with someone else you may select. It is important to be as objective as possible about the qualifications of a successor, even if it is a family member. Remember that you and other family members, as well as employees and customers, will benefit most from having competent management at the helm of the business when you’re no longer there.

Buy-Sell Agreements

As part of a business succession plan, you may want to consider a buy-sell agreement as an integral part of your overall strategy. A buy-sell agreement is a legal document that defines the rights of buyers and sellers with regard to interests in a business. Most importantly it does the following:

• Identifies in writing who will succeed you and thus sets up a smooth transition of ownership.
• Determines when a buyout will be triggered. You get to determine the appropriate triggering events to incorporate into your buy-sell agreement. Besides the death or disability of an owner, you might consider a divorce, or a bankruptcy, or the termination of employment or retirement as triggers that put the agreement into effect.
• Finally, it’s important for the buy-sell agreement to set forth a method of valuing the business. The method chosen (dollar amount or formula) for valuation should reflect the input of professional legal and tax advisors

How will it be funded?

6-18-2016 1-20-49 PMIt’s great to have the outlines in place for a successor to eventually run the business, but how about the critical issue of funding the buy-sell agreement before it kicks in? The individual you choose to run your company, be it a senior employee, partner, or family member, may not have the cash or the ability, to borrow at the time required by the agreement. A life insurance policy can be a straightforward solution. The death proceeds of the policy can be paid to your successor upon your death and the funds can then be used to purchase the business from your heirs. Or, the cash value of the policy can be used as a down payment to purchase the business at your retirement.

In addition, it may be prudent to explore how your unexpected disability could affect not only your plans for a successor, but also your own or your family’s financial well-being. A disability buyout policy can provide a successor with cash to purchase the company from you upon your disability.

As a business owner, you’ve worked diligently over the years to ensure your company’s success. Navigating all the hazards of the economy and your particular market is no easy task. It would be a shame if a lack of professional succession planning caused the business to flounder or fail and thus undo your prior achievements as well as your hoped-for legacy. With proper planning and professional help, this trap can be avoided — and you can leave the legacy you desire.

For more information on the financial, risk and wealth management strategies that Wayne Kuykendall provides, please contact him/her at insert company-approved phone number, email, website, and/or physical address as desired.
Prepared by MetLife
Delivered courtesy of Wayne Kuykendall, Financial Services Representative
Strategic Financial Partners, an office of MetLife

6-18-2016 1-19-20 PM

4-15-2016 5-27-40 PMEvery small business owner has a unique story to tell regarding why they decided to establish their company. For some, it’s the opportunity to be their own boss. For others, it’s to satisfy a product niche that no other local business is offering. Still others are thinking big picture and looking to offer something truly innovative that might take off on a national scale. And for some, it’s a combination of all these reasons.

Regardless, once a business has gone through the lean and mean early years and started to establish a reputation for itself—not to mention, a comfort level that it might be around for the long haul—it’s time for owners to give some thought to their long-term personal objectives.

In other words, what would you like to achieve now that the business is up and running? Twenty or thirty years down the road, what is the measure of success?

Once the day-to-day questions about business viability have been resolved, it’s important to set personal goals. This will help small business owners define exactly what they would like to achieve, both for themselves, their family, and the employees who have helped make the business what it is.

In setting these objectives, it’s important to ask the following:

• Am I working to strengthen my personal finances and build wealth? Many business owners become so engrossed in running their companies that they inadvertently end up putting their personal finances on the back burner. Although it’s easy to tie up most of your liquid assets in a business, to achieve financial independence and build personal wealth, it’s important to make personal savings a priority. By conducting regular financial reviews, and taking follow-up action as needed, you can help develop and strengthen your personal financial position.
• Am I preparing for retirement? Many tax-deferred, qualified retirement savings vehicles, such as 401(k) plans, are available to business owners and their employees. The retirement plan that is best in a given situation is often determined by the size of a company, as well as the ages and salaries of its employees. In addition, nonqualified plans allow business owners to provide selective benefits for themselves, as well as their key employees.
• Have I developed an exit strategy? Although it’s sometimes difficult to think past any given quarter, it’s important for small business owners to give some thought to whether the business will be marketable if and when the decision is made to sell it. Developing an “exit” strategy can help provide cash commensurate with the value of the business in the event you choose—or are forced (due to death or disability)—to divest.
• Are you looking to retain the company within your family? Your company, like many others, may be a closely-held business operated by more than one family member. If you wish to keep your company in your family, it’s important to learn about transfer tax issues and develop a business succession plan that will help keep your long-term goals and objectives on the right track.

Stay Focused
Unfortunately, these questions are not ones that should be asked once and then forgotten. Personal goals and priorities change and develop over time. To make sure the priorities that you established in your thirties are still the priorities you have as you grow older, it’s important to conduct a periodic review of your personal and business priorities. Annual reviews can help ensure your business activities are still consistent with your long-term personal goals and objectives.

Prepared by MetLife
Delivered courtesy of Wayne Kuykendall, Financial Services Representative
Strategic Financial Partners, an office of MetLife
For more information on the financial, risk and wealth management strategies that Wayne Kuykendall provides, please contact him at (256) 777- 4524, wayne.d.kuykendall@strategicfinancialpartners.com, 105 S. Marion Street, Suite 202, Athens, AL 35611.
About the MetLife Premier Client Group
The MetLife Premier Client Group (MPCG) provides consumers and small businesses with access to local financial professionals across the United States who can provide advice and guidance tailored to their financial needs. MPCG financial professionals stand out in the market for their holistic financial strategies, their team-oriented approach to client service and their adherence to a core financial planning philosophy that helps clients both grow and safeguard their assets. MPCG’s highly trained and credentialed representatives provide their clients with a wide range of services, including wealth management, retirement planning, estate planning and small business planning. For more information, please visit www.metlife.com/premier.

About MetLife
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.

The MetLife Premier Client Group is a distribution channel of Metropolitan Life Insurance Company (MLIC), New York, NY 10166. Securities and investment advisory services offered through MetLife Securities, Inc. (MSI) (member FINRA/SIPC) and a registered investment adviser, 1095 Avenue of the Americas, New York, NY 10036. MLIC and MSI are MetLife companies.

Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. You should seek advice based on your particular circumstances from an independent tax advisor.

MetLife, its agents and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisors regarding your particular set of facts and circumstances.
By: Wayne Kuykendall, Financial Services Representative with
Strategic Financial Partners, an office of MetLife.

L0315415941[exp0416][All States][DC,GU,MP,PR,VI]
By: Wayne Kuykendall, Financial Services Representative with
Strategic Financial Partners, an office of MetLife.

1-22-2016 10-59-15 AMFor millions of Americans, “charity begins at home.” That’s where they’ve decided to make a difference by donating money to local religious, educational, social, or cultural organizations. In addition to the immense satisfaction that comes from giving to others, when done as part of an overall estate plan, charitable giving can provide tax benefits for the donor and his or her estate.

Charitable Gifts of Life Insurance

Gifts of life insurance have some unique advantages:
• Life insurance is a contract and passes outside the will by beneficiary designation, so it generally cannot be contested in probate proceedings.
• Since the payment of a life insurance policy death benefit to a named beneficiary other than decedent’s estate is not part of the probate process, it is private, not a matter of public record like assets passing by will.
• Donor is eligible for an income tax charitable deduction when he/she transfers an existing life insurance policy to charity.
• Ability to leverage a charitable donation through the death benefit.
• There are no probate delays.
• Other assets are kept intact for the donor’s family.

Gifts of life insurance can be made in essentially two ways. Under the first, the insured is the owner of the policy and the charity is the beneficiary. This arrangement is used when an insured/donor desires to retain control over the insurance policy. Under this arrangement, the premiums paid are not eligible for an income tax charitable deduction. Additionally, since the insured owns the policy at death, the death benefit will be includable in his or her gross estate under IRC Section 2042, but it will be 100% deductible from the estate, since it is payable to a charity (IRC Section 2055).

Under the second, the charity is owner and beneficiary. Unlike the situation where the insured retains ownership, the premium may be income tax-deductible within IRS guidelines. State “insurable interest” laws must be checked to determine if a charity can be the initial applicant of life insurance on the life of a donor.

If the donor gives an existing policy to charity, the lesser of the fair market value of the policy or the policyholder’s basis (generally the premiums paid) is eligible for an income tax charitable deduction. (See IRC Section 170(e)(1)(A), Treas. Reg. 25.2512-6(a) and Tuttle v. U.S., 436 F.2d 69 (2d Cir. 1970). Additionally, future gifts of cash to the charity for premium payment purposes are also eligible for an income tax charitable deduction within IRS guidelines.

Charitable Remainder Trusts (CRTs)
If the prospective charitable donor is looking for a way to generate income, reduce estate and income taxes, defer taxes on gains, and make a significant charitable contribution without reducing his or her family’s inheritance, a charitable remainder trust and a wealth replacement trust may be the right tools. These trusts can allow an individual to make a gift to a charity while retaining an interest in the gifted asset during his or her lifetime.

CRT Mechanics and Tax Aspects
As a general rule, it is best to fund a CRT with an asset that, if sold outside the trust, would produce substantial long-term capital gains tax. After the trust is executed, the donor transfers this appreciated, low- or non-income producing asset to the CRT. The CRT sells the asset and gives the donor an income stream for life, for a term of years, or for joint lives. At the death of the donor (or the donor’s named non-charitable income beneficiary if other than the donor) the remaining trust assets pass to the charity. Here’s how it works:
• Upon creation of the trust, the donor is eligible for a current income tax deduction based on the present value of the future amount passing to the charity.
• No tax on the gain is paid by the trust when it sells the asset, since the trust is exempt from such tax when it sells the asset.
• The donor receives an income stream and pays income taxes on the income as received.
• At the end of the trust term, the remainder passes to the designated charity and estate taxes may be reduced, since the remainder passing to charity has been removed from the estate.

“Wealth Replacement” Trust
As indicated, the remaining assets in the trust eventually pass to the charity and not to the donor’s heirs. The income tax savings produced by the charitable donation combined with the income generated by the trust can be used to pay premiums on a life insurance policy owned by a properly formed irrevocable life insurance trust sometimes known as a “wealth replacement” trust. The life insurance policy in this trust replaces the value of the assets that pass to the charity in the CRT. Since the life insurance is purchased and owned by the irrevocable trust, the proceeds should be income and estate tax free. The donor’s family is, therefore, made whole.

Prepared by MetLife
Delivered courtesy of Wayne Kuykendall , Financial Services Representative with Strategic Financial Partners, an office of MetLife.
For more information on the financial, risk and wealth management strategies that Wayne Kuykendall provides, please contact him at256-777-4524, wayne.d.kuykendall@strategicfinancialpartners.com , and 105 S Marion Street Suite 202, Athens, AL, 35611.

1-22-2016 10-59-01 AM 1-22-2016 11-01-42 AM

Fitness, Fiscally Speaking

12-18-2015 3-30-29 PMEvery one of us hopes to live to a ripe old age, enjoying good health, family and friends along the way. The luckiest of us will. But those of us who are less lucky may have to deal with serious and often ongoing health challenges that come with longevity. It’s unsettling to consider the possibility of needing daily assistance with the most basic activities such as eating or bathing. Yet, statistics indicate that more than half of all people reaching age 85 need some sort of help. Planning for those potential needs now may save a lot of money and heartache later.

Long Term Care

By definition, long term care (LTC) describes the various services provided to help meet the ongoing needs of people who cannot care for themselves independently. People of any age may need LTC, but in this article we will discuss the assistance that may be needed by chronically ill or disabled seniors to help them perform the activities of daily living, which include eating, dressing, bathing, and toileting. LTC can be provided at home or in assisted living or nursing home facilities. Care providers may be paid professionals or unpaid family members or friends. Medicare, the country’s largest senior health insurance plan, generally does not pay for it, which often comes as a surprise to people who assumed their care would be covered.

The Cost Of Care
Long term care can be extremely expensive. Though rates vary according to geography and the type of care needed, the cost of long term care- which is associated with the activities of daily living such as eating, bathing, and dressing, or the supervision of someone with Alzheimer’s- can easily climb over $70,000 per year. These numbers will mostly likely rise as life expectancies extend and the demand of care continues to increase. Unless you are part of the wealthy minority and are unconcerned with leaving an inheritance behind, paying for LTC out of pocket is nearly impossible.

Relying On Medicaid
All too often one spouse or both wind up requiring care and a significant amount of their savings may be spent paying for it. It is important to note that, in order to be eligible for Medicaid, individuals must meet strict income eligibility requirements. Also remember that most of us are used to having choices when it comes to our medical care. When you enter the Medicaid system, you are required to see Medicaid doctors and use Medicaid facilities. In some circumstances, these may not be the service providers you would choose if you had other options. Beginning in 2006, the largest generation in this country’s history-the Baby Boomers- began to turn 60. Many of them have amassed substantial wealth; however, their savings could quickly be reduced if they must pay for long term care expenses out of their own pockets.

Confronting The Costs
One strategy to prepare for the looming costs of LTC is with Long Term Care insurance (LTCi). Interestingly, though many pre-retirees seem to know that LTCi is available, they still do not own any. The reasons are diverse: some people do not want to think about becoming disabled; others wrongly assume Medicare will cover the cost of care; and still others are averse to the cost of LTCi policy premiums.

In truth, you may buy LTCi and never use it. In this case, you will have paid premiums for years, maybe even decades, and all that money will be lost the same way your car insurance and homeowner’s insurance premiums are lost if you never file a claim. However, if you should someday need long term care, just one year of coverage will more than make up for all the premiums you ever paid. Considering the average stay in a nursing home is 870 days- a little more than two years- chances are, if you ever require that type of LTC, the coverage afforded by your LTCi will give you more than your money’s worth.

Things To Consider When Buying LTCi
If you decide that long term care insurance is an important asset protection tool in your overall financial plan, the next step is to determine which type of policy best suits your needs and budget. As you evaluate the diverse and often complicated options, enlisting the help of a qualified financial professional is strongly recommended. Depending on your geography and the insurer, you may be able to take out an individual policy or one that allows spouses to share benefits. You will need to decide how many years’ worth of coverage you want, how much of a daily benefit amount you think you will need, and whether that benefit amount will be adjusted for inflation. Additionally, you should consider the following when choosing an insurer and a policy type.

Choice Of Caregivers And Location Of Care
You may want the option of choosing private caregivers or even non-professional caregivers such as family members or friends. For some people, home care is most desirable. Be sure to examine whether your policy allows for care in a variety of locations, including home care, assisted living facilities, and nursing homes.

Pay close attention to whether the policy excludes any illnesses, diseases, or pre-existing conditions. Since Alzheimer’s disease is a leading cause of dementia, and thus the need for around-the-clock care, make sure your LTCi policy covers it.

Cost Of Premiums
Of course you need to evaluate how the cost of policy premiums fit into your budget, but you should also be aware of whether the insurer reserves the right to raise rates.

Waiting Periods
Many policies insist on a pre-determined waiting period before full benefits kick in. Often, you can choose the length of the waiting period of your policy; typically, the longer the waiting period, the lower the policy premiums.

Know All Your Options- An Alternative To Traditional Long Term Care Insurance

To meet the growing need to finance long term care, some life insurance companies offer living care riders which can be attached to certain life insurance policies. In most cases, these riders can help policyholders offset the high cost of long term care by accelerating the death benefit of their life insurance policy. The payments toward LTC costs generally act as a lien against the policy’s death benefit by providing the funds, if needed, to pay for long term care, and thereby reducing the final payment to beneficiaries in the event of the policyholder’s death. But if long term care is never needed, the full death benefit is paid to the beneficiaries as long as premiums are paid according to the policy’s terms.

Each company’s life insurance policies and riders are different, and it is best to speak to a financial professional about the details. Though a long term care rider may not pay all the costs associated with long term care, they can help defray the sometimes overwhelming financial burden.

Growing old is part of life. Considering the alternative, it’s not so bad. Of course, no one wants to become a burden to their loved ones. Proper planning now can help you maintain your financial independence and freedom of choice later. Insurance of any kind offers financial protection for whatever the future may hold. No one has a crystal ball: we don’t know what the future holds. But you can prepare for whatever tomorrow brings through smart planning today.
By: Wayne Kuykendall, content courtesy of AXA Advisors

AXA Advisors

11-20-2015 4-09-51 PMBack in the early 1990s, a California financial planner named William Bengen developed a retirement income strategy known as “the 4 percent rule.” Basically, it says that as long as you withdraw no more than 4 percent of your initial portfolio, adjusted for inflation, each year during retirement, you shouldn’t run out of money.

For years, professionals used this “rule” to determine how much clients should withdraw from their retirement assets each year. But today, many are not so sure it’s a good idea. Here’s why.

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The 4 percent rule was developed in a different economic time.
• In the 1990s, it seemed like you couldn’t lose in the stock market. Today, investors are more likely to experience volatility, making it nearly impossible to count on a consistent return.
• Back then, the yield on a three-month Treasury bill was 6 percent. Today, it’s close to zero. Even in 2002, the five-year U.S. Treasury yield was still 4.5 percent. Today, it is less than 2 percent. Without an interest rate at or above, 4 percent, investors can’t be sure that they’ll replace the assets they take from their portfolio each year.

11-20-2015 4-10-24 PMSome now use 4 percent as a starting point.
Some financial professionals believe in using the “4 percent rule” as a starting point for retirement income planning, rather than using it as a hard and fast rule. That way, they can incorporate flexibility into the strategy, giving clients a greater chance of having income throughout for as long as they live.

Here are a few suggestions for your retirement income strategy:

Adjust your spending based on market performance.
If the market performs well, take a little more. If it performs poorly, take a little less. That way, you’re consistently pulling out a similar percentage of your current assets – not your initial balance.

Don’t take it if you don’t need it.
There may come a time when you’ll need a larger percentage of your assets for health reasons, so if you don’t need it now, don’t take it.

Consider adding guaranteed income to the mix.
By investing a portion of your assets in an annuity, you may be able to receive enough guaranteed income each year to cover some everyday expenses in retirement. Some variable annuities offer income benefits that provide withdrawals of 4 percent each year. Adding guaranteed income to the mix can give you more flexibility with your other assets, as well as more confidence that your assets will last as long as you do.

Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided by this document is not intended or written to be use, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor. AXA Advisors, LLC and AXA Network, LLC do not provide tax advice or legal advice. This article is provided by Wayne Kuykendall. Wayne Kuykendall offers securities through AXA Advisors, LLC (member FINRA, SIPC) 105 South Marion Street Suite 202 Athens AL 35611 and offers annuity and insurance products through an insurance brokerage affiliate, AXA Network of Alabama and its affiliates.

By:Wayne D. Kuykendall
105 South Marion Street
Suite 202
Athens AL 35611
(256) 777-4524

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10-17-2015 10-41-25 AMAbsolutely. While a non-employed spouse might not bring home a literal paycheck, he or she is most likely still working hard, especially if you have children. Most stay-at-home parents are on the go from dawn till dusk: cooking, cleaning, paying bills, running errands, taking the kids to and from activities, making home repairs, helping with homework and other minor crises.

Consider how much a stay-at-home parent does in the course of a day – and how much it might cost to pay someone else to do those jobs.

According to www.salary.com, a stay-at-home parent works an average of 96.5 hours a week do the the jobs of:

• Nanny
• Tutor
• Handyperson
• Chauffeur
• Gardener
• Psychologist
• Cook
• Nurse
• Housekeeper
• Bookkeeper

If you paid for all of those services, you’d have to shell out $118,905 a year – that’s $38,126 in base salary and $80,779 in overtime.

10-17-2015 10-41-35 AM

While nothing can replace a parent and spouse emotionally, it’s wise to protect against the financial hardship that the loss of a stay-at-home spouse could bring. One of the best ways to do that is by purchasing life insurance.

Term life insurance is one of the most affordable kinds of life insurance available, and can be purchased for a period of time (like while your kids are still in school or until the mortgage is paid off).

Not sure how much life insurance to purchase?
Contact your financial professional to review your specific situation and see what you can do to protect your family’s future.

You can also use AXA’s Life Insurance Calculator on https://us.axa.com/goals/life-insurance-protection.html to see how much coverage you might need, based on your age and income (or the value of the services you provide, if you stay home).

Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided by this document is not intended or written to be use, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor. AXA Advisors, LLC and AXA Network, LLC do not provide tax advice or legal advice. This article is provided by Wayne Kuykendall. Wayne Kuykendall offers securities through AXA Advisors, LLC (member FINRA, SIPC) 105 South Marion Street Suite 202 Athens AL 35611 and offers annuity and insurance products through an insurance brokerage affiliate, AXA Network of Alabama and its affiliates.
By: Wayne D. Kuykendall – Content courtesy of AXA Advisors
105 South Marion Street
Suite 202
Athens AL 35611
(256) 777-4524

10-17-2015 10-41-49 AM 10-17-2015 10-42-00 AM

8-23-2015 12-01-28 PMWhat To Do With Your Retirement Funds When You Change Jobs

There are many new challenges to face if you happen to be changing jobs or retiring – not the least of which is the decision of what to do with the retirement funds that have accumulated in your 401(k) and other retirement plans over the years of service with your employers. These decisions may have a significant impact on your future financial security in retirement.

Option 1
Your employer hands you a check for the amount in your retirement plan.

This may look like a bonanza, but selecting this option could be a mistake. First, your employer is required to withhold 20% from your lump sum distribution, so you will only receive 80%. Second, if you are younger than 59 ½, you may be subject to a 10% additional federal income take penalty for early withdrawal. Third, you are liable for paying income taxes on the full amount – if you fail to roll over the full amount of your funds, including the 20% that was withheld, into an IRA within 60 days.

8-23-2015 12-01-55 PM

Option 2
Leave the money with your old employer.

If you have more than $5000 in your former employer’s retirement plan, you can usually leave the money where it is. (Check with your employer.) The advantage of doing this is that it relieves you of making a decision for the time being while maintaining the tax deferral of your assets. The downside is that you are limited to the investment choices offered by your ex-employer – or even fewer choices, since some companies have additional restriction for non-active employees. Additional disadvantages are that you cannot make new contributions to your account.

Option 3
Move your retirement money to your new employer.

This option works only if you are moving to another job. Even then, your new employer may not accept rollovers from a previous plan or may impose a waiting period. Also, the investment options offered by your new employer may not be as extensive as you want. The benefit is that you maintain your assets’ tax deferral and benefit from the convenience of having your assets in one place.

Option 4
Put the money into a traditional IRA Rollover.

By having your former employer’s retirement play pay the IRA custodian directly, you avoid the 20% withholding or any penalties. There are numerous benefits to your own IRA Rollover:
• A potentially wider choice of investment opportunities – you can select the stocks, bonds, mutual funds or other investments that are right for you.
• The ability to withdraw without penalty for some purposes. Withdrawals can be make without penalty by taking a series of substantially equal periodic payments for at least 5 years or until after you reach age 59 ½. Withdrawals are subject to normal income tax penalty. Thus if you are planning to retire before you reach 59 ½, this method can enable you to dip into your IRA Rollover without penalty.

*Please note, there may be other eligible retirement plans which can accept funds.

This article is provided courtesy of:
Wayne D. Kuykendall
105 South Marion Street, Suite 102
Athens, AL 35611
Tel: (256) 777-2524

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