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Figuring out to handle issues regarding 401K retirement plans can be particularly tricky for some people. When you own a company and offer this kind of benefit to your employees, you want them to get the most out of the experience. People use this kind of feature to save money for retirement, and they take it out of the income they’ve worked hard for. If you’ve hired a new associate who has a 401K with their previous company, then you want to offer them a way to roll it over to the plan that you offer.
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Consider New Associates
When you find a great new candidate to join your company’s team, you want to give them flexible benefits. Allowing them to do a 401K rollover from their previous company to the plan that you offer is a huge benefit. Sometimes, people can’t keep this benefit once they leave an employer and must find a way to roll their funds over to avoid hefty tax penalties.
Think About Former Employees
If you have an associate who chooses to leave your company, then they may have to perform a 401K rollover elsewhere. For example, if this person goes to work for a company that doesn’t offer a 401K plan to its associates, then they will have to find a place to put their account or pay taxes. By allowing your former employee to keep their money in the account after they no longer work for you, you will be saving them a large amount of their hard-earned funds. Check with your benefits provider to see how you can arrange this for former employees.
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Understand Other Options
When people want another option for their 401K rollover, they usually turn to an individual retirement account or IRA. As a business owner, it’s important to understand this option especially if you’re investing for your retirement. This option can help a person avoid the tax burden that comes with cashing out a 401K before the minimum age. If you have a 401K from a previous job and wish to put the money elsewhere, choosing this option is usually a good idea. Check with your local financial advisor to learn more about this process.
Understanding more about how to transfer from one 401K to another can help you make informed benefits choices for your employees. When you offer more options to your workers, they will be happier as a result.
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