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Know Your Distribution Options

Understand the options for your retirement savings

If you're changing jobs or retiring, what you do with the money in your employer-sponsored retirement plans can have a significant impact on your future savings. You may want to consider some of the options below, and their advantages and disadvantages, for managing your retirement savings - this shouldn't be considered a complete list of options.

Decide which option is right for you

Leave your retirement savings in your former employer's retirement plan, if plan allows

  • Your savings keep their tax-favored growth potential.
  • You may have the ability to receive installment payments over a period of time, if plan allows.
  • You can typically keep your current investments.
  • Your account is subject to the rules and investment options of your former employer’s plan.
  • You can’t make additional contributions.

Move your retirement savings into your new employer's retirement plan, if plan allows

  • Your savings keep their tax-favored growth potential.
  • Your account is subject to the rules and investment options of your new employer’s plan.
  • You can keep your retirement savings in a single account.
  • You need to see if your new employer’s plan allows this option.

Move your retirement savings into an Individual Retirement Account (IRA)

  • Your savings keep their tax-favored growth potential and allow for account consolidation.
  • You have access to a wider variety of investment options.
  • This option is available through many financial service providers, including Wells Fargo.
  • Consider fees and services when comparing IRA and employer plan options.*
  • Generally involve higher costs than those associated with qualified retirement plans.

Withdraw your money as cash

  • Your money becomes immediately available.
  • The withdrawal amount is considered current year income.
  • There is a 20% mandatory withholding for federal taxes and the potential for additional state withholdings.
  • You may lose retirement savings and future tax-favored potential growth.
  • The Internal Revenue Service may charge a 10% early withdrawal penalty if you’re under age 59 ½.

Before making this choice, use our retirement withdrawal costs calculator.

Additional IRA and distribution options considerations

Please keep in mind that rolling over your qualified employer-sponsored retirement plan (QRP) assets to an IRA is just one of multiple options for your retirement plan. When you are reviewing your options, consider features such as investment options, fees and expenses, and services offered, when penalty-free withdrawals are available, treatment of employer stock, when required minimum distributions begin, and protection of assets from creditors and bankruptcy. Investing and maintaining assets in an IRA will generally involve higher costs than those associated with QRPs. Before making a decision, you should read the information provided on your distribution options to become more informed and speak with the current retirement plan administrator, and tax professional before taking any action.