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Welcome to November. Don't forget to set your clocks back tonight. Ahhh....an extra hour of sleep.
I know most of you were probably wondering where our October Newsletter was. Well for the last two months, we have been researching all the different ways we can help you increase your retirement income with very little out of pocket cost. What kind of additional retirement dollars are we talking about? Depending on your age and marital status, it could be from tens of thousands of dollars to hundreds of thousands of dollars. This could benefit over 90% of our clients.
We are in the middle of extensive training at this time. Look for a little more information, next Saturday, November 9th, with our roll out on Saturday, November 16th.
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| My Company Just Terminated Their 401(K) Plan
NOW WHAT?
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Companies that establish a 401(k) tax-deferred retirement plan for you and their other employees normally intend the plan to continue indefinitely. But circumstances, such as business closures, mergers or acquisitions, can arise where the company must terminate the plan. The Internal Revenue Service has established rules and procedures for terminating 401(k) plans and distributing the funds. The process is complex, and you should be aware of how the process works. SHUTDOWN RESOLUTION The first step in 401(k) plan termination requires that the company's directors adopt a resolution to terminate the plan as of a specific date. The resolution must also freeze the plan in place, suspending payouts until the termination date. Internal Revenue Service and U.S. Labor Department regulations mandate that the company's decision to terminate the plan automatically vests all company contributions to your 401(k) account, regardless of where you were on the plan's vesting schedule. SEND NOTICES The company must send you and anyone else with money in the plan a notice of plan closure by mail, phone or other means. The company must also give notice to the IRS that the plan is being terminated. The notice to you must include the date of plan termination and what you must do to secure your funds. If you haven't kept former employers updated as to your whereabouts and they shut down their 401(k), you might miss the notice. Companies must make extensive efforts to locate participants whose whereabouts are unknown but may not always be successful. The notice must include a contact that can answer any questions you have. You must complete the required paperwork to get your money. Observe the due date. Delay in sending in the forms means delay of your payment. VERIFY COMPLIANCE IRS rules require that 401(k) plans must be in compliance with all regulations at the time of termination. Companies must conduct an internal compliance audit and correct any shortcomings prior to plan termination. Failure to achieve compliance could subject the company to costly IRS penalties and cause lengthy delays in getting your 401(k) money paid to you. There's nothing you can do in such a situation except wait. Companies can file a Form 5320 with the IRS, asking it to review their plan and make a determination about whether it is in compliance. DISTRIBUTE FUNDS
The final part of closing down a 401(k) is sending your money to you. All funds in the plan must be distributed within one year after the plan's termination date. If you didn't keep the company aware of your current location or if you didn't return the paperwork, the funds belonging to you must be sequestered in a custodial IRA in your name. Funds belonging to a deceased participant must be paid to the decedent's estate or heirs. Once all the funds are distributed, the last step in the shutdown process is to file a final termination report to the IRS on Form 5500.
YOU HAVE AN IMPORTANT DECISION TO MAKE
Since these funds were originally intended to help provide financial security during retirement, you need to carefully evaluate which of the following options will best ensure that these assets remain available to contribute to a financially-secure retirement.
TAKE THE FUNDS
You can withdraw the funds in a lump sum and do what you please with them. This is, however, rarely a good idea unless you need the funds for an emergency. Consider:
►A mandatory 20% federal income tax withholding will be subtracted from the lump sum you receive.
►You may have to pay additional federal (and possibly state) income tax on the lump sum distribution, depending on your tax bracket (and the distribution may put you in a higher bracket).
►Unless one of the exceptions is met, you may also have to pay a 10% premature distribution tax in addition to regular income tax.
► The funds will no longer benefit from the tax-deferred growth of a qualified retirement plan.
ROLL OVER THE FUNDS
You can take the funds from the plan and roll them over to a traditional IRA, where you will have more control over investment decisions. This approach offers the advantages of preserving the funds for use in retirement, while enabling them to continue to grow on a tax deferred basis.
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401(k)'s HERE...401(k)'s THERE...
401)k)'s EVERY WHERE!!
Roll them into one single IRA and earn
an immediate 10% interest bonus
And a guaranteed 1st year interest rate of 2.10%.
We have a safe and secure financial solution to your Rollover IRA. When MARKET RISK is no longer an option and LOW CD RATES make you fume, you should know about Fixed Index Annuities (FIA's).
Fixed Index Annuities can be an excellent, conservative alternative in a "low interest rate" or "volatile" market environment. When you purchase a Fixed Index Annuity, should the corresponding stock market index rise, you participate in the increase. If the market falls, you do not lose any of your hard-earned money because your money is never directly exposed to market risk!
That's what makes this newer class of annuity products so attractive to those accumulating assets for their retirement.
Some Advantages of Fixed Index Annuities
. Safety of Principal
. Reasonable Rate of Return when the stock market is down
. Power of Tax Deferred Earnings
. Potential to Avoid Probate
. Lifetime Income Available
. Perfect for IRA and 401(k) Rollovers
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Sincerely,
Mike Zimmer & Rebecca Thacker
Bay State Insurance Agency Limited
410-758-1680
1-877-411-3702
"Your Safe Money Team"
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Autumn is a second spring where every leaf is a flower. Albert Camus _____________________________ "I Love The Fall"
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Quick Links www.yoursafemoneyteam.com Individual Medical Insurance (under age 65) | |
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A Sliver Lining for Your Retirement Account
If you transfer your IRA's, Annuities, old 401(k)s, or any other retirement account to us, one of our major insurance carriers will guarantee you an immediate 10%premium bonus;
$50,000 becomes $ 55,000
$100,000 becomes $110,000
$250,000 becomes $275,000
In addition to your premium bonus, for folks age 40 and above, how would you like to learn how you can add an income rider with a guaranteed 6.25% income growth for up to 10 years with an option to extend for an additional 10 years. This is not a prediction, this is a guarantee. You simply need to take a lifetime income.
Isn't it time you stop gambling in the risky stock market and get a good night's sleep? If you would like to have guaranteed growth and an income you can count on, give us a call at 410-758-1680 to learn how to earn more.
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Thanks to those you have served,
who do serve, and
most of all,
to those who have made the ultimate
sacrifice in service to America.
Let Freedom Ring.
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Thanks to YOU the word is spreading. Thanks to all of our clients and friends who graciously referred us to their friends and neighbors last month! There's no question we have the BEST clients on the entire planet. Our business is built on word of mouth advertising and we would like to thank everyone who has been kind enough to recommend our services to their friends. We promise to treat your friends just like we treated you, with respect and understanding. We promise to always do what is right for our clients.
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The purpose of this newsletter is to provide information of general interest to our clients, potential clients and other professionals. The information provided is general in nature and should not be considered complete information on any product or concept described. For complete information, please contact our office at 410-758-1680 or 1-877-411-3702. _______________________________________ |
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