Planning For Your Future

Individual Retirement Accounts (IRAs)

Movers and shakers should know about rollovers.

If you’ve been making contributions to your employer’s retirement plan with income that’s already been taxed—known as after-tax contributions—you’ll be able to roll over those assets to an Individual Retirement Accounts (IRA) when you leave the company.

Goose egg showing Individual retirement accountsThe ABC’s of IRAs. 

Your Individual Retirement Accounts (IRAs) can be invested in mutual funds, stocks, bonds, or other securities, including CDs and treasuries. This flexibility makes opening an IRA a good opportunity to rebalance your retirement portfolio, by rolling your retirement savings into instruments not traditionally offered by employer plans.

Consolidating your funds in an IRA gives you the freedom to control your overall retirement plan and keep this money accessible no matter where your job takes you. There are two types of IRAs:

A Traditional IRA allows individuals to make an annual contribution up to specified maximum limits. Traditional IRAs maximize your retirement savings by allowing any money you earn on your IRA contributions to grow tax deferred until withdrawn.

A Roth IRA enables any earnings to grow tax-free—as long as your income doesn't exceed a certain level. Unlike a Traditional IRA, you can't deduct your contributions but you can benefit from other valuable tax advantages. For example, you won't owe any taxes or penalties on the assets you withdraw from a Roth IRA as long as you have met specific requirements. And you can withdraw funds penalty-free for purchases like your first home or qualified educational expenses.

You can choose to contribute both to a Traditional IRA and a Roth IRA in the same tax year, but your combined contributions to all your IRAs cannot exceed the annual maximum limit in total.
For 2017, the maximum you can contribute to all of your Traditional and Roth IRAs is $5,500 ($6,500 if you're age 50 or older). View other cost of living increases for 2017.
 

Rolling over to an IRA doesn’t have to make your head spin.

Instead of your current employer writing a check in your name—and subjecting you to steep fees and penalties in the process—they’ll make the check payable to your IRA's custodian or to your new employer's plan trustee on your behalf.

This approach saves you the 20% mandatory federal income tax withholding and the 10% early withdrawal penalty if you’re under age 59 ½. There are two ways to set up your rollover:
 
Direct (custodian-to-custodian) Transfer: If you are a participant in a retirement plan administered by Sentinel Benefits, contact our Service Center by calling
(888) 762-6088 to request a distribution form and Sentinel IRA application.

Sixty-day Rollover: You can withdraw your IRA from the other institution and reinvest it in a Sentinel IRA. You must complete the rollover within 60 days of receiving the withdrawal to avoid income taxes and, if you are under age 59 1/2, the 10% IRS early-withdrawal penalty. Only one rollover is allowed per IRA in any 12-month period.

A Rollover IRA: If you retire or change jobs, a Rollover IRA is designed to help you avoid mandatory withholding of 20% and preserve the tax-deferred status of this distribution of eligible assets.

To determine how much of your contributions and earnings were "pre-tax" versus "after-tax," review the statements you received or ask your current employer's benefits office for assistance.

Take the next step.

To learn more, contact one of our advisors, or check out some FAQs on IRA Rollovers. We're here to help you get started today!