Rollover Planning: an Example

Retirement & Rollover Planning: An Example

Henry and June have worked hard to put 3 children through college and expect their youngest to graduate next spring. Once tuition payments are behind them, they plan to spend a few more years building their nestegg.

           Over the years, Henry and June have been diligent about accumulating assets in their retirement accounts.

           Since the two are not approaching retirement in the near future, they are both 51 and have almost 15 years still to go, they feel comfortable and prepared to make a career change at this stage in life. They hope to one day soon make their dream of opening a B&B a reality.

When Henry leaves his current employer:

     He knows he’ll need to do something with his retirement plan distribution of $50,000. With his previous 4 jobs, he was able to leave his retirement earnings in his employers 401(k) accounts, with smaller amounts of $4,000, $17,000, $45,000 and $39,000. Henry and June are considering consolidating or possibly rolling over their retirement assets into one account. They are also considering using the $50,000 toward a downpayment on a B&B instead or paying off their children’s college tuition.

     Henry and June know there are several options, but they aren’t sure what to do. They just don’t want to make the wrong decision.

What do they do next?