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I want to cash out i no longer work at par kan?

Sep 06, 2016 by Denny in  |  Flag
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Denny,

If you no longer work for Par Kan and have a retirement account with them you have a few options:

1) You can cash out the retirement account. If it is a 401(k) or other qualified account and you decide to withdraw you will be taxed on the withdrawal at ordinary income rates and could perhaps be penalized 10% if you aren't 59 1/2 or weren't older than 55 when you separated from service..

2) You can roll the account to an IRA or other employer-sponsored retirement plan. If you don't plan on needing or using the money now you can roll the 401(k) to an IRA at a discount brokerage firm such as Fidelity or Charles Schwab. This is a non-taxable transaction and you can continue to benefit from tax-deferred growth. If you started employment with another employer and they offer a similar retirement plan, you may be able to roll the Par Kan 401(k) into your new employer sponsored 401(k) plan as well. This would also be a non-taxable transaction.

3) You can convert the 401(k) to a Roth IRA all at once or over a period of time. If you are temporarily out of work, find yourself in a lower tax bracket, or retired it may make sense to convert the 401(k) to a Roth IRA. You could do this all at once or over time, depending on the size of your account and tax bracket.

4) You can keep the funds in your 401(k). You always have the option of keeping the funds in your 401(k), however I don't recommend this as you may be paying unnecessary fees, have limited investment options and will be required to withhold 20% in taxes on any withdrawal.

I assume you'll most likely take advantage of option 1-3, if you are ready to move forward simply contact the HR department of Park Kan and they can help you or put you in touch with the party that can. Also, you may be able to just log in online and take care of the distribution/rollover yourself.

Feel free to reach out to me with any follow-up questions. Thank you!

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