- Advantages & Disadvantages
- Changing Jobs
- Take a Break From Taxes
- Traditional vs Roth
- Hello Retirement
- Company Terminating the Plan
IRA 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:
|
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
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