Corporate retirement plan rollover
I have just retired and I don’t need my retirement money yet. My Co. says that I can roll it over. But I would like to know if I can split my roll over. Can I roll over one part of the money to an annuity set up as an IRA and a second portion of the money to stock?
Can I set up the stock to be an IRA? Can multiple IRAs be created from one retirement account rollover? Are there any tax consequences to either rollover?
My investment adviser can create the IRA for the annuity, but how do I create an IRA for the stock? He is not a broker and only advises on annuities and mutual funds.
Permalink Submitted by Alan Spross on Fri, 2007-10-26 20:00
Your plan administrator is not required to offer you multiple direct rollovers, although some might choose to. If yours does not, you can have one direct rollover (avoids withholding) done to a brokerage IRA, and then you can partition that IRA into other IRA account(s) including an IRA annuity.
When you partition the IRA, that should also be done by direct transfer, so you don’t get caught in the one rollover per 12 month limitation.
Before you opt for a transfer to an IRA, be sure to check out any potential for NUA with any highly appreciated employer stock shares. This opportunity is forfeited if the shares are transferred to an IRA. You should also be wary of using an IRA annuity since these funds are already tax deferred, and most annuities have high commissions and other expenses that erode returns.
There are no tax consequences if the direct transfers are done correctly, and no required withholding.
Permalink Submitted by Al Fry on Fri, 2007-10-26 20:34
I do not sell annuities, however I should point out that SOME annuities have very low expenses (less that 1%) and can offer death benefit and other guarantees not offered by other investments. Many of these guarantees can add additional costs and/or fees to the annuity.