Rollover IRA

When you leave your employer to start a new job or retire, there's no doubt you're dealing with change and the stress that goes along with it. With everything you have to think about, deciding what to do with your accumulated retirement savings is probably the last thing on your mind. But it's the one decision you can't afford to put off.

The Results Last a Lifetime

That money you've worked so hard to save will probably be one of your biggest sources of income during your retirement.

You're facing an important choice: what to do with your retirement savings. And what you decide now will shape your future quality of life. It could mean the difference between enjoying a comfortable retirement and struggling to make ends meet.

You have several options to choose from and it's important that you know the facts before you make a decision. Discuss your options with your financial advisor to ensure that you are choosing the one that's right for your own situation.

Know Your Options

You can do one of four things with the money you've accumulated in your employer's plan:

 1. Take the Cash.2. Transfer the money to your new employer's plan.
Advantages
  • You get the money right away
  • Easy access to your retirement savings
  • Immediate resources if you have no other source of income
  • You pay no penalties or taxes
  • You maintain tax-deferred status of your retirement savings
  • You might be eligible for loans from your new employer
  • You consolidate your old retirement savings with your new ones
Disadvantages
  • To get that money, you’ll have to pay a high price $10,000 distribution
    –2,800 federal tax
        –500 state tax
    –1,000 penalty tax
    _____________
    $5,700 could be all you see of your original $10,000.

    Even worse, you lose the opportunity to let that money continue to grow tax deferred.
  • Not all employers provide this option
  • You may not be eligible to join the retirement plan until you’ve provided a year of service
  • The new plan may offer few investment options
  • Your ability to control and access your money may
    be limited
 3. Leave the money in your employer's plan.4. Roll the Money into an OppenheimerFunds IRA.
Advantages
  • Requires no effort and you pay no penalties or taxes
  • You maintain tax-deferred status of your
    retirement savings
  • You may continue to be eligible for loan provisions
    from your previous employer
  • You pay no penalties or taxes while your savings
    continue to grow tax deferred
  • You can choose from more than 60 time-tested funds
    representing most asset classes that can help you and your financial advisor build a well-diversified portfolio
  • Your retirement savings are consolidated into a “nest egg” you never have to move again—but you can move the money into a future employer’s plan if you wish
  • Online and phone-based tools give you easy, anytime access to your account
  • You can work with a professional financial advisor to manage your retirement investments

 

Disadvantages
  • Your employer’s plan may not allow this option
  • The plan may not offer many investment choices
  • You have limited access to, and control of, your money
  • You’re leaving your money with a former employer


    If the value of your account is less than $1,000 your account can be cashed out by your previous employer. However, if the value of the account is between $1,000 and $5,000, the money may be automatically rolled into an IRA. Check with your previous employer to see if they have a cash-out provision.
  • Care must be taken to ensure the assets are transferred properly and expediently. Working with your financial advisor may limit these concerns

1. Hypothetical example assumes a 28% federal tax rate, a 5% state tax rate and a 10% early withdrawal penalty tax. Your tax rates may be higher or lower.

Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.

Before investing in any of the Oppenheimer funds, investors should carefully consider a fund's investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.

Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.
Two World Financial Center, 225 Liberty Street, New York, NY 10281-1008