IRA Rollovers
If you are about to retire or change your job, and if you have participated
in your employer's retirement plan, you may soon be eligible to
receive a substantial sum of money from the plan. How you receive
that money is generally up to you. One popular option today is a
single lump sum or other "eligible rollover distribution," either
of which can be rolled over into an indvidual retirement account
to secure tax advantages.
The
Rollover IRA Advantage
Tax deferral is probably the biggest advantage when it comes to
rollover IRAs. When you receive an eligible rollover distribution
from your employer's qualified retirement plan, you have a choice. You
can either:
-
Pay
tax immediately on the distribution, or
-
Defer
paying tax by rolling the distribution over into an IRA (or
another eligible rollover plan)
If
you choose the IRA rollover you can postpone paying tax until distributions
begin. And you don't have to start receiving payments from your
IRA until April 1 of the year after you reach age 70½.
In
addition, when you use the IRA rollover, the income generated by
investing your eligible rollover distribution will also continue
to grow on a tax-deferred basis. So, for example, if you have
a $250,000 distribution that grows at an annual rate of 6%, you
can accumulate an additional $84,556 over a five-year period.
If you didn't rollover this $250,000
and paid taxes on the distribution; now the value of your money in
five years would be substantially lower.
The F&M Advantage
One major advantage when
establishing a rollover IRA with F&M Bank is our flexibility. You
can choose from among several investment alternatives. You can choose an
"individually directed" IRA if you prefer to make your own
investment decisions. You may also choose an "investment advisory" IRA
if you prefer to make your own investment decisions
based on recommendations you receive from our investment officers. Finally,
you may choose an "investment management" IRA where you provide F&M
Bank permission to invest on your behalf.
Our rollover IRAs are easy to implement
and simple to maintain. All we require is a signature on
one or two forms in order to establish the
rollover IRA of your choice.
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to IRAs
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