Comparing IRAs

Investments Resource Center

Changing Jobs

At your job, you were lucky enough to have an employer-sponsored retirement plan. Now that you’re leaving, it’s time to make an important decision about it. How can you take the money with you, continue to enjoy tax-deferred growth potential, avoid penalties and stay in control of your investment?

Start by asking your employer if you can leave the money where it is. It may depend on how long you’ve worked with the company and the type of retirement plan you have. Leaving your money with a former employer may not be the best choice, but it helps to know which of these options are available to you:

Cash it out − Take the cash now
Let it be − Leave it in your current plan
Roll it into an IRA − Move your retirement savings to an individual account you control
Take it with you − Transfer your existing account balance into your new employer’s plan

There are a number of advantages and disadvantages to each of these options.

All your options − advantages and disadvantages

Please know that neither Nationwide^® nor its representatives provide tax or legal advice. You should consult with an attorney or other professional advisor for such advice.

Options	Advantages	Disadvantages
Cash it out	Immediate access to your money	Income taxes have to be paid 20% must be withheld for federal taxes State and local taxes may also apply Additional 10% tax penalty, if you’re younger than 59½ years old No chance for growth if you don’t reinvest
Let it be	No immediate taxes to pay Money continues to have tax-deferred growth potential Account may be transferred to a new employer’s plan or an IRA without being taxed	Variable products may experience a decrease in value due to poor investment performance Plan changes may not line up with your investment objectives Potential loss of investment choice
Roll it into an IRA	Help from an investment professional Control over how your money is invested Potentially, a greater variety of investment options No immediate taxes (To avoid tax withholding and possible penalties, be sure any loans on the retirement plan are paid off and your current plan custodian is instructed to send funds directly to your new rollover IRA custodian) Investments have tax-deferred growth potential	Variable products may experience a decrease in value due to poor investment performance Investment charges and fees may be higher than in your group retirement plan
Take it to your next employer	Account balances can be transferred without taxation Investments have tax-deferred growth potential	Variable products may experience a decrease in value due to poor investment performance Option may not be available depending on your new employer’s plan Plan changes may not line up with your investment objectives Potential loss of investment choice
Generate income	Choose from: Guaranteed income for life Regular, systematic payments Fixed or variable investments Tax deferral	Variable products may experience a decrease in value due to poor investment performance Payments, in some cases, do not pass to heirs upon your death Limited access to your money once it is annuitized

Options

Advantages

Disadvantages

Cash it out

Immediate access to your money

Income taxes have to be paid
20% must be withheld for federal taxes
State and local taxes may also apply
Additional 10% tax penalty, if you’re younger than 59½ years old
No chance for growth if you don’t reinvest

Let it be

No immediate taxes to pay
Money continues to have tax-deferred growth potential
Account may be transferred to a new employer’s plan or an IRA without being taxed

Variable products may experience a decrease in value due to poor investment performance
Plan changes may not line up with your investment objectives
Potential loss of investment choice

Roll it into an IRA

Help from an investment professional
Control over how your money is invested
Potentially, a greater variety of investment options
No immediate taxes (To avoid tax withholding and possible penalties, be sure any loans on the retirement plan are paid off and your current plan custodian is instructed to send funds directly to your new rollover IRA custodian)
Investments have tax-deferred growth potential

Variable products may experience a decrease in value due to poor investment performance
Investment charges and fees may be higher than in your group retirement plan

Take it to your next employer

Account balances can be transferred without taxation
Investments have tax-deferred growth potential

Variable products may experience a decrease in value due to poor investment performance
Option may not be available depending on your new employer’s plan
Plan changes may not line up with your investment objectives
Potential loss of investment choice

Generate income

Choose from:

Guaranteed income for life
Regular, systematic payments
Fixed or variable investments
Tax deferral

Variable products may experience a decrease in value due to poor investment performance
Payments, in some cases, do not pass to heirs upon your death
Limited access to your money once it is annuitized

To avoid tax withholding and possible penalties, be sure any loans on the retirement plan are paid off and your current plan custodian is instructed to send funds directly to your new rollover IRA custodian. Also know that neither Nationwide^® nor its representatives provide tax or legal advice. You should consult with an attorney or other professional advisor for such advice.

Unless you are making withdrawals for qualified expenses, withdrawing any or all of the funds will trigger a 20% mandatory tax withholding and a 10% early withdrawal penalty, if you are under age 59½, in addition to paying ordinary income tax.

Potential purchasers seeking to use an annuity to fund a qualified or other tax-advantaged retirement plan should understand that the use of an annuity for such purpose is not necessary in order to defer taxation of investment earnings. Guarantees are subject to the claims-paying ability of the issuing company.

Not a deposit • Not FDIC or NCUSIF insured • Not guaranteed by the institution • Not insured by any federal government agency • May lose value

NFW-1342AO