Many pilots have questions about rolling over their 401k's to IRA's. Generally, you have three choices when it comes to handling the money in a former employer’s retirement account.
- First, you can cash out of the account. However, if you choose to cash out, you may be required to pay ordinary income tax on the balance plus a 10% early withdrawal penalty if you are under age 59½.
- Second, you may be able to leave the funds in your old plan. But some plans have rules and restrictions regarding the money in the account.
- Or third, you can roll the money into an IRA or potentially into your new employers plan if permissible. Why do so many people choose an IRA rollover?
Read the full article for more details about this process.