Options for managing an old 401(k)
Transcript of the video:
Playful music plays throughout.
A man and woman are hiking in some hills. The man looks through binoculars.
Have multiple retirement accounts?
Here are your options.
As the hikers walk away, the scene refocuses on a squirrel walking on its hind legs along a tree branch and carrying several acorns.
Female narrator: Saving for retirement is a big deal and an important part of your financial plan.
The tree branch leads to a large hole in the trunk of the tree. There's a pile of acorns in the hole, and the squirrel tosses the acorns he's carrying on top of the pile.
Narrator: And retirement savings accounts, such as a 401(k), an employer-sponsored retirement account you contribute to, are one way you do that.
The scene changes to a forest with four trees, each with a hole full of acorns in its trunk. A turtle wearing a black fedora walks along the ground and a red bird flies among the trees. The squirrel climbs up various trees to check on the acorns in the holes.
Narrator: Over the course of your career, it's quite likely you'll have contributed money to retirement plans with multiple employers. Managing your scattered retirement plan accounts could be cumbersome.
Text appears in the sky, above the treetops.
You have 4 options.
Narrator: But you have four options for how you may manage them.
In the acorn-filled hole in one tree is a sign that says, "Previous Employer's 401(k)." Behind the tree, the squirrel walks along a path. He's wearing a fishing hat and carrying a fishing pole made from a stick.
Narrator: First, you can do nothing—just leave your money in your former employer's plan. Not all employers let you do this, but some do.
As the squirrel walks away, an acorn falls from an upper branch, hits a lower branch, and caroms into the hole.
Narrator: The earnings are tax-deferred.
The squirrel is now standing on another branch and is looking through a spyglass made out of a branch. He's checking on acorns in the holes in other trees. The red bird pops his head into the field of view, chirps, lifts a wing to wave in greeting, and chirps again.
Narrator: And you'll need to keep an eye on all your retirement assets in new and existing retirement savings accounts.
Text again appears in the sky.
The squirrel is walking along another branch. He's carrying many more acorns than he was earlier and is heading toward a hole in a tree with many more acorns than any other hole. In the hole is a sign that reads, "Current employer's 401(k)." He adds his acorns to those in the hole.
Narrator: Another option is to move your money into your current employer's 401(k) plan, if available.
The squirrel takes a good look at his large pile of acorns. A leaf unfurls from above the hole. Text on the leaf reads, "My progress," and below that is a gauge with a needle that indicates the growth of his acorn savings.
Narrator: This way you can see how your planning for the future is going, manage all your retirement savings more conveniently in one place, continue potentially growing your money while deferring taxes,
The squirrel is now sitting next to the hole looking relaxed. He pulls out a smartphone, checks it out for a moment, then puts it away and closes his eyes, looking very content.
Narrator: and you could have new investment options available to you. Of course, there are factors to consider when making a decision.
Text again appears in the sky.
The scene changes to another tree with a hole in which there's a sign that reads, "Rollover IRA."
Narrator: Another option is to move your money into a Rollover IRA, a retirement account that lets your savings potentially continue to grow
The squirrel, carrying a basket of acorns, walks along a branch toward the hole.
Narrator: while retaining the tax-deferred status of your retirement plan account.
He dumps the acorns into the hole and playfully spins the basket between his paws.
Narrator: Depending on your situation, you may have more than one Rollover IRA option.
The squirrel walks away.
Text again appears in the sky.
The squirrel is on a branch with his eyes closed as he eats an acorn. There are piles of acorns to either side of him.
Narrator: Finally, you can consider the option to withdraw your retirement savings as a cash distribution from your former employer's plan.
A gray paw reaches in and takes an acorn from a pile. The focus shifts to show a gray squirrel wearing glasses and carrying a wooden bucket with the word "Taxes" on it. She puts the acorn in the bucket, and the other squirrel shrugs his shoulders in acceptance.
Narrator: Doing this may have tax implications, early withdrawal penalties, or both, in the year of distribution. Remember, ALL your options may have tax implications.
At the bottom of the tree is a large hole with a sign above it that reads, "Advisor." The squirrel is consulting with his tax advisor—the turtle wearing a black fedora.
Narrator: So you'll want to speak with your tax advisor when deciding which path may be right for you.
The squirrel is now lying on a branch, looking very relaxed. Above his head is a wooden sign that says, "Charles Schwab."
Narrator: When it comes to your retirement savings, you have options. You also might have questions.
The scene fades to white, and the sign turns into the Charles Schwab logo.
Narrator: Schwab Retirement Plan Services is here to help answer questions you may have regarding your options. Call us at 800-724-7526 to learn more.
Brand music plays.
An acorn rolls across the phone number, which transforms into "Own your tomorrow®."
Own your tomorrow®
©2023 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. (1222-2SCV)
A rollover of retirement plan assets to an IRA is not your only option. Carefully consider all of your available options which may include but not be limited to keeping your assets in your former employer's plan; rolling over assets to a new employer's plan; or taking a cash distribution (taxes and possible withdrawal penalties may apply). Prior to a decision, be sure to understand the benefits and limitations of your available options and consider factors such as differences in investment related expenses, plan or account fees, available investment options, distribution options, legal and creditor protections, the availability of loan provisions, tax treatment, and other concerns specific to your individual circumstances.
The information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, financial planner, or investment manager.
Schwab Retirement Plan Services, Inc. provides recordkeeping and related services with respect to retirement plans and has provided this communication to you as part of the recordkeeping services it provides to the plan.
©2023 Schwab Retirement Plan Services, Inc. All rights reserved. (1222-2SCV) 2023 08