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Answer:
Dear
A. Roche,
The
process of moving money from an employer-sponsored
plan to an investment company that you select is known
as a rollover.
About
taxes
You
will not be hit with taxes or a penalty if you arrange
to have the transfer of your IRA to be handled institution
to institution. In other words, you should NOT
have a check made out to you and then send that check
to BUYandHOLD.
That
is because if your employer hands you a check, the
employer must, by law, withhold 20% of it for taxes.
And, just to make matters even worse, you then must
come up with that 20% when you do the rollover ?-
that's because you won't get back the 20% your employer
withheld in taxes until you file your tax return.
Avoiding
taxes
Instead,
call the manager who handles your company's retirement
plan and tell him/her that you wish to transfer your
account. You will be sent several forms to fill out
and probably a postage-paid envelope. One of the questions
you will be as asked is where you want the money sent.
In your case, you fill in:
BUYandHOLD, c/o
Freedom Investments, Inc.
375 Raritan Center Parkway,
Suite D
Edison, NJ 08837
You
will also want to open
an account at BUYandHOLD before initiating
the transfer. You haven't mentioned what type of retirement
account it is, so be sure to indicate if it's a traditional
IRA, a Roth IRA, a 403(b), etc.
Finally,
let the two companies complete the transfer. That
way you'll avoid any penalties or taxes.
Note:
Plan on about 30 days for the process to be completed.
About
beneficiaries
This
is a good time to check and see who you have listed
as the beneficiary or beneficiaries of your retirement
account. It's a good idea to name primary beneficiaries
-- your first choices, as well as secondary beneficiaries
-- to receive your money if the primary beneficiaries
are deceased when you die.
Although
you do not have to name your spouse (if you are married),
some plans require spousal consent in order for you
to name someone other than your husband or wife.
Good
luck!
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