Partial rollovers provide you with an opportunity to transfer part of your IRA or employer-sponsored retirement account into another eligible retirement plan.
Partially rolled over accounts can help simplify your finances, reduce fees or enhance investment options.
If you’re contemplating a partial rollover, ensure it makes sense for your specific circumstances and has an objective justification for doing so.
Partial rollovers are a great way to invest in alternative assets
An investment rollover may be the key to diversifying into alternative assets, like gold, silver and exotic derivatives that don’t typically feature in traditional retirement portfolios but could still offer substantial financial gain.
An effective partial rollover can benefit all involved – your tax benefits, investments in assets of interest to you, and ultimately creating the feeling of satisfaction within yourself.
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If your current 401(k) custodian permits partial rollovers, we’ll take care of everything else – be it via check or wire – to transfer you your account safely. Just allow enough time for this process to finish before we alert you if any hurdles come our way in making sure a successful transfer takes place.
They’re tax-free
As opposed to 401(k) plans, Roth IRAs do not permit withdrawal without incurring tax liabilities; this can be an unwanted financial burden and it might be beneficial to consider switching over to traditional IRAs instead.
Partial rollovers can be completed through trustee transfers, in which your plan custodian transfers an agreed-upon portion of funds to an IRA at another institution. You also have the option of conducting direct rollovers by having your plan custodian wire them directly to an IRA provider of your choosing.
If you decide to conduct a partial rollover, be mindful that your retirement plan custodian will withhold 20% for taxes; additionally, if you are under age 59 and a half and redepositing the full amount into a new IRA within 60 days will avoid an early distribution penalty of 10 percent.
If you decide to do a partial rollover, keep in mind that financial professionals who recommend Roth IRAs might earn commissions or fees from this transaction. When selecting your financial professional for this type of partial rollover, ensure they have your best interests at heart.
They’re easy to do
Partial rollovers provide an easier alternative to full rollovers without incurring tax consequences.
Doing a partial rollover depends on your personal financial circumstances. Doing one could make sense if you are dissatisfied with the investment choices provided by your existing 401(k) plan or searching for better opportunities.
If you are considering a partial rollover, make sure to contact your 401(k) plan administrator and inquire about its process. Alternatively, seek professional guidance from a certified financial planner who will help determine if such a rollover would suit you best.
Partial rollovers can be easily accomplished, but it’s essential that you transfer money only between accounts that offer similar tax treatments. For instance, if your 401(k) contains company stock that must be transferred out, it is preferable to transfer this out into an IRA with traditional tax treatment rather than into a Roth IRA, which has different tax implications.
They’re risky
Partial rollovers are an effective way of diversifying your retirement portfolio; however, they can be risky as well. One reason being they don’t allow for as much control of retirement savings as traditional IRAs do.
As part of a partial rollover, some investments could be lost, leaving less funds available to invest in alternative assets. Furthermore, you may lose access to some of the best investment options within your 401(k), making it more challenging to achieve a solid return.
Consider all risks related to partial rollover when working with a financial professional to manage your 401(k). Ask about fees and services offered, and don’t be afraid to question recommendations that seem excessively favorable.
