![]() ![]() However, you have alternatives: You may be able to leave your money in your former employer's plan you can roll it into your new employer's plan or you can withdraw the money entirely. You might consider a rollover IRA if you want to consolidate your retirement savings into one plan or are looking for investment choices that aren't available in either your old or new employer's plans. There are a number of important considerations when evaluating whether a rollover is appropriate for you. ![]() You can roll over your money into a Roth IRA or a traditional IRA. Rollover: With a rollover IRA, you can transfer money from a workplace retirement plan sponsored by a former employer into an IRA without paying withdrawal penalties at the time of transfer.For 2020 and later, there is no age limit on making regular contributions to traditional or Roth IRAs.Some contributions may be tax-deductible.Anyone with earned income can contribute to a traditional IRA.You aren't eligible for a Roth IRA if your earned income is above a certain level.You must begin taking distributions at age 70½.After age 59½, withdrawals are penalty-free, but taxed as current income.After age 59½ and if the account has been open 5 years, earnings are tax- and penalty-free.Contributions are always tax- and penalty-free.For someone who believes she is in a lower tax bracket now than she will be later on, doesn't mind deferring the tax benefit and qualifies to contribute, 2 a Roth IRA can be a good choice to consider.Īt a glance: Roth IRA vs. Roth: With a Roth IRA, contributions are made in after-tax dollars and qualified distributions can be withdrawn tax-free after age 59½.1 Someone who anticipates being in a lower tax bracket after retirement might want to consider a traditional IRA. ![]()
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