Certified Financial Planner | Wye Financial Partners
Chris Parks is a Certified Financial Planner™ and LPL Financial Advisor at Wye Financial Partners, a division of Shore United Bank N.A. After working in financial planning for several years, Chris wanted to become a more powerful advocate for his clients. He decided to expand his financial knowledge and earned his CERTIFIED FINANCIAL PLANNING™ designation in 2019. Chris is a lifelong resident of Queen Anne’s County and received his college degree in mathematics from Salisbury University.
How do I manage my retirement plan assets from a former employer?
When leaving your job or retiring, you have several options available for managing your retirement plan assets. You may be able to leave the money in your current plan, if your employer allows. Or you can take a lump-sum cash distribution, which will be subject to income tax and a 10% penalty if you’re under age 59½ (unless an exception applies), resulting in a potentially significant tax bill. Finally, you can roll the money into another tax-deferred account, preserving the primary tax advantages.
There are two types of rollovers: direct and indirect. A direct rollover, or trustee-to-trustee transfer, is paid from your plan directly to your IRA or to your new employer’s retirement plan. The funds are never payable to you. An indirect (60-day) rollover is a payment made to you that you later roll over to an IRA or an employer retirement plan.
What should I know about an indirect rollover?
There are two major disadvantages to indirect rollovers. First, your plan is required to withhold 20% of the taxable portion of your payment for federal income taxes. You’ll get credit for that amount when you file your federal income tax return, but if you want to roll over the entire distribution, you’ll have to come up with the 20% that was withheld from other sources. Second, you run the risk of missing the 60-day deadline, which would make your distribution taxable. On the plus side, you’ll have use of the funds for up to 60 days. In general, direct rollovers are the safer choice.
Should I work with a financial planner to help guide me?
Yes, a financial planner can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered. Before making any decisions, make sure you consider the potential advantages and disadvantages of the types of accounts you are considering. Don’t leave your financial future to chance; reach out today!
This information is not intended as tax or legal advice, so always consult a tax or legal professional.
Christopher Parks CFP® | Wye Financial Partners | LPL Financial Advisor: 30 E. Dover Street, Easton, MD 21601 | 410-763-8543 | www.wyefinancialpartners.com
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA and SIPC). Insurance products are offered through LPL or its licensed affiliates. Shore United Bank N.A. and Wye Financial Partners are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Wye Financial Partners and may also be employees of Shore United Bank N.A. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of Shore United Bank N.A. or Wye Financial Partners. Securities and insurance offered through LPL, or its affiliates are: Not Insured by FDIC or Any Other Government Agency | Not Bank Guaranteed | Not Bank Deposits or Obligations | May Lose Value.
