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So you're changing jobs...
It can be both a stressful and exciting time in your life—new people, expanded opportunities, and different responsibilities. It is also time to re-evaluate your benefits package including your retirement savings account.
At Prudential Retirement®, we understand this life change can get pretty hectic, so when it comes to deciding how you are going to distribute your retirement savings, we try to make it as easy for you as possible.
To determine which distribution option best suits your lifestyle, simply review the graph to understand the advantages (+) and disadvantages (-) of each. More detailed descriptions can be found by just clicking on the appropriate tab:
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Defer Current Federal Tax
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Tax-Deferred Growth
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_
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Broad Investment Choices
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Guaranteed Lifetime Income
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Immediate Access
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Retain Ability to Rollover
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Tax-Free Investment Transfers
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10-Year Averaging (born before January 1, 1936)
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Avoid 10 Percent Tax Penalty
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+***
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Flexible Payout Options*
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Defer 20 Percent Tax Withholding
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*Plan restrictions may apply.
**If assets are invested in an eligible IRA or rolled into another employer's eligible retirement plan within 60 days, you may retain this feature.
***Some distributions prior to age 591/2 may be subject to a 10 percent federal income tax penalty. For specific tax consequences, please contact your tax advisor. Prudential Retirement does not provide tax advice.
****If you remain in a plan, the investment choices are selected by a party which has a fiduciary obligation to act in your best interest.
The fees associated with account balances remaining in the plan will be different from, and are likely to be less than, the fees associated with a rollover IRA. You should review your Plan's provisions to determine whether you are permitted to keep your account balance in the plan sponsored by your former organization or discuss rollover provisions in your new retirement plan. You may contact Prudential at 1-877-778-2100 to obtain a comparison of fees between your former retirement plan recordkept by Prudential and an IRA.
The IRA is not affiliated with the employer sponsored plan or plan sponsor, and a rollover to an IRA means you are no longer part of an employer sponsored plan (and, for defined benefit or cash balance plans, are not eligible for annuity payouts under the plan or the potential for insurance by the Pension Benefit Guaranty Corporation). Once assets are rolled over to an IRA, they normally cannot be rolled back to a former employer's plan.
If your vested account balance is more than $1,000 but less than $5,000 at the time benefits are payable, and you do not choose to receive a distribution, your benefit will be rolled into an Individual Retirement Account (IRA), regardless of any prior elections or provisions to the contrary. For further details, call Prudential Retirement at 1-877-PRU-2100 .
You can also make systematic or periodic withdrawals, which involves regularly taking a fixed amount of money out of your account in monthly, quarterly or annual installments.
This option can be a plus because it allows you to designate the amount of money you receive. That means that the money that stays in the account continues to grow tax-deferred.
Getting Started
Depending on plan provisions, you may be able to take periodic withdrawals* from your account while still keeping your funds and your investments in the plan. Flexible options may be available. Call Prudential Retirement at 1-877-PRU-2100 or the number located on your participant statement to find out more.
*Periodic withdrawals are not a guarantee that you will be paid for your entire life. Generally, you may alter or stop your periodic payments at any time. |
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Please keep in mind that If you remain in your plan, the investment choices available to you are selected by your previous employer, who has a fiduciary obligation to act in your best interest.
Your entire balance can be placed in an Individual Retirement Account (IRA), which can give you a great deal of flexibility. You can withdraw money as you need it, paying taxes only on the amount you withdraw, while keeping most of your assets in a tax-deferred account with a choice of investment options.
Getting Started
Prudential Retirement makes rolling over to an IRA simple. Just call
1-877-PRU-2100 or the number located on your participant statement and opt for a transfer of your current plan account balance to a Prudential Rollover IRA. You may be able to transfer eligible company stock without having to sell first.
Securities products and services are offered by Prudential Investment Management Services LLC (PIMS), Three Gateway Center, 14th Floor, Newark, NJ 07102-4077. Member SIPC. PIMS is a Prudential Financial company. Prudential Retirement, Prudential Financial, PRU, Prudential and the Rock logo are registered service marks of The Prudential Insurance Company of America, Newark, NJ and its affiliates. Prudential Retirement is a Prudential Financial business.
The IRA is not affiliated with the employer sponsored plan or plan sponsor, and a rollover to an IRA means you are no longer part of an employer sponsored plan (and, for defined benefit or cash balance plans, are not eligible for annuity payouts under the plan or the potential for insurance by the Pension Benefit Guaranty Corporation). Once assets are rolled over to an IRA, they normally cannot be rolled back to a former employer's plan. |
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As you are changing jobs, you may want to roll your retirement account balance over to your new employer's plan depending on plan terms. Your ability to do so will depend on your new employer's plan terms and provisions.
There are no tax consequences for direct rollovers* and your money continues to grow tax-deferred. However, with this option, your investment options, access to your account, and waiting period are subject to the new employer's plan rules.
Getting Started
Verify with your new employer that their plan provisions will accept a rollover from another qualified retirement plan. Consider the investment selection and possible restrictions. Call Prudential Retirement at
1-877-PRU-2100 or the number located your participant statement to request the paperwork to rollover to your new retirement plan. |
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*Your initial withdrawal would be subject to automatic 20% tax withholding at the time of the withdrawal unless you directly rollover your withdrawal. If you don't directly rollover your money you may still rollover to a qualified plan within 60 days, less the 20% (unless you make up the 20% out of your own pocket).
An annuity is an insurance contract in which you pay a set amount of money to an insurance company, which then provides you (and a possible beneficiary), a lifetime income and a death benefit. Typically, you're guaranteed a fixed stream of payments either for life or for a fixed period. Guarantees are based upon the claims-paying ability of the underlying insurance company.
Two common annuity types are fixed (returns tied to fixed income investments, guaranteeing a minimum interest rate) or variable (returns linked to the underlying performance of stocks, bonds, and other investments).
Often retirees will use a portion of their savings to purchase an annuity. This option provides the retiree with a guaranteed stream of income to cover essential living costs. The remaining savings can be invested or used to pay for entertainment, travel, and unexpected expenses.
Getting Started
There are advantages to choosing a Prudential Retirement annuity*:
- Purchase rates based on group mortality-this means a higher payout
- Multiple annuity options to meet individual needs
- Monthly annuity payments can be by check or direct deposit
A Retirement Counselor can provide you with quotes and information by calling 1-877-PRU-2100 or the number located on your participant statement. Remember, annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force.
*Annuities are insurance products issued by The Prudential Insurance Company
of America, Newark, NJ, a Prudential Financial Company. |
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When you take your money in a lump sum, you'll owe income taxes on the entire amount when you withdraw it. Systematic withdrawals involve taking out regular sums in monthly, quarterly or annual installments. Once taken, your money is no longer in a tax-deferred account. The only way to defer tax on future earnings is to re-invest it in tax-exempt instruments.
Getting Started
If this option is for you, you can contact a Retirement Counselor by calling 1-877-PRU-2100 or the toll-free number located on your Retirement Savings quarterly statement, from 8 a.m. to 6 p.m. ET, Monday through Friday.*
*You should discuss your particular situation with your tax advisor. Because each situation is unique, neither we nor our representatives can provide tax advice. |
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| Contact Us |
Retirement Counselors
1-877-PRU-2100 |
The Prudential SmartSolution
1-877-PRU-2100 |
Brokerage Services
1-888-244-6237 |
Hours: Monday-Friday
8 a.m. - 6 p.m. ET |
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