My ESOP Retirement Money

ROLL MY ESOP TO AN IRA

MOST COMMON OPTION

Pros

  • Your ESOP money moves to your IRA Income Tax free.
  • Tax deferred growth on your money
  • Professional management of your IRA

Cons

  • You are not able to borrow against your individual IRA.
  • Fees may be higher or Lower or lower in a different plan.
  • An IRA may have less protection from creations
SPEND IT NOW
LEAST DESIRABLE OPTION

Pros

  • You will receive cash after paying taxes and penalties
  • No penalties for those over age 59 1/2, however taxes will still be due on the amount of withdrawal
  • May be appropriate if you have no other financial options

Cons

  • The money you receive will be fully taxable
  • You will have extra Income to Declare on your Taxes
  • You will lose the benefit of having your money grow
  • If you retire before age 59 1/2 you may pay a 10% penality for early withdrawal
I WANT MY MONEY NOW
MOVE MY MONEY TO ANOTHER EMPLOYER SPONSORED PLAN

Pros

  • No taxes or penalties are due
  • If you plan to retire before age 59 1/2 or after 73 age, if your new plan allows, you may be able to borrow against your company plan account value
  • The company plan may provide additional protection if you are worried about creditors
  • Your company plan fees may be lower than in an IRA

Cons

  • Your investment options in the company plan will likely be more limited than in an IRA
  • Once you move monies into the company plan, you may be required to leave them there until you leave the company (quit or retire)
  • When you withdraw your funds, even during retirement, your distribution frequency may be limited
  • Access to personal financial planning or professional advice is often less available in a 401k than working with a professional in an IRA
  • Your fees may be higher than in an IRA
ESOP RETIREMENT MONEY