Bill Cordell, CFP® | Retirement F.A.Q.
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Frequently asked retirement questions

What are my retirement saving options?

There is a wealth of retirement savings vehicles available to today’s investors – from 401(k), 403(b) and defined contribution plans offered through employers to privately funded individual retirement accounts (IRAs). The plans and strategies you use will vary based on your age, employment, present needs and future goals.

What is a 401(k)?

A 401(k) plan is a tax-deferred retirement savings vehicle established by companies for their employees. Each employee contributes a fixed percentage of his or her salary to the plan, which the company may match or supplement. These funds are then allowed to grow tax-free until withdrawal.

What is a 403(b)?

Also known as tax-sheltered annuity plans, 403(b)s have features very similar to those of 401(k)s. Created for certain public employees and tax-exempt organizations, 403(b) accounts are generally invested in either annuities or mutual funds.

What is a rollover IRA?

A rollover IRA is a retirement account established by an individual. These accounts allow you to “roll” the proceeds from a 401(k) or 403(b) into a traditional IRA, which can be invested in a variety of asset classes including stocks, bonds, mutual funds and more. Any earnings in an IRA grow tax-free until distribution.

What are the benefits of a rollover IRA?

Rolling one, or several, employer plans into an IRA, offers you considerable advantages including:

  • The convenience of a single, consolidated retirement account that isn’t tied to an employer,
  • The ability to avoid the taxes incurred by cashing out a 401(k) or 403(b) when and if you leave your current job,
  • Powerful investment options, including greater variety and flexibility, and
  • Enhanced estate and tax planning opportunities.

In addition to rolling over your 401(k) to an IRA, there are other options. Here is a brief look at all your options. For additional information and what is suitable for your particular situation, please consult us.

  • Leave money in your former employer's plan, if permitted
  • Roll over the assets to your new employer's plan, if one is available and it is permitted.
  • Rollover to an IRA.
  • Cash out the account.