What you need to know if Changing Careers

A neighbor might offer congratulations, a Good Neighbor helps you with the transition.

Questions you may have:

What do I do with the investments in my old retirement plan?
I’ve been saving, but what do I do until I can start in my new company’s plan?
What happens to my group health and life insurance?

Make the Most of your Old Retirement Plan
The money from your previous employer’s retirement plan may be one of your largest assets. Know your options to make an informed decision about what to do with those funds.

Roll Your Investments Directly into a State Farm IRA and:
Avoid paying current federal income taxes and penalty taxes.
Allow your savings to grow tax-deferred: no amount in the IRA will be taxable until withdrawn from the IRA. Tax-deferred growth enables your money to grow faster than it would in a taxable account.

Move Your Investments to your New Employer's Plan and:
Continue to grow your money tax-deferred and avoid income tax and the 10 percent tax penalty.
Consider the new plan guidelines that may not be as flexible as a traditional IRA or may not accept assets from your previous plan. Check with your new plan’s administrator for details.

Leave Your Assets Where They Are
The easiest option, your money will continue to grow tax-deferred. The plan, however, may not provide this option for account balances under a certain specified amount.

Cash Out Your Investments
You’ll have a ready supply of money to spend or invest as you see fit. Note that your former employer must withhold 20 percent of the balance for federal income tax purposes. You may be subject to state income taxes and the 10 percent federal withdrawal tax penalty.

Comparing Your Options
Consolidating old retirement accounts into a single, traditional IRA can be a great way to help simplify your retirement planning. Learn More (PDF 32 KB)

Continue Saving
Begin saving as soon as possible if your new employer offers a 401(k), 403(b), or another retirement savings plan.
If you must wait for eligibility, or none is offered, then continue to contribute to a traditional or Roth IRA.

Talk it over with you Insurance Agent
Sit down with your agent to discuss your investment options, including:

Mutual Funds
Annuities
Certificates of Deposit

Gather the necessary paperwork from the plan administrator from your old job. Your agent will initiate the rollover, and we will notify you when it is complete.

Know when you are Eligible for Insurance Benefits:

Protect Your Family’s Future
Health insurance is important in the event that you, or any member of your family, are ever sick or injured. Having this coverage will help protect you from financial hardships.

Disability insurance helps cover financial responsibilities should you have an illness or injury that makes you unable to work.

Life insurance can provide for your loved ones when you’re no longer here to help.

If your new employer doesn’t offer health or disability insurance, or if you’re self-employed, you may want to purchase coverage from your agent. Your agent also can help you determine the amount of life insurance coverage that’s right for you and your family.

Other Things to Consider:
Discuss important financial considerations with your human resources department.

Ask when your health, disability, and life insurance benefits will expire.
Calculate unused vacation, sick pay, and other compensation due.
If you have moved, notify your former employer of your new address.

For more information visit www.bobbyromander.com