take charge of your money when you leave your job lfd0405-0574 [presenter's name]...

Take Charge of Your Money when you leave your job

LFD0405-0574

[Presenter's Name][Presenter's Title][Presenter's Firm Information][Date of Presentation]

2 Leaving Your JobLFD0405-0574

Source: US Bureau of Labor Statistics, August 27, 2002

Did you know?

The Average American holds 10 jobs between ages 18 and 36.


America’s Financial Focus

• Finance retirement• Live comfortably/enjoy life• Pay for education• Save money• Home purchase• Other

Source: Employee Benefit Research Institute, 2004 Retirement Confidence Survey

Most important

savings goals:


Sources of Retirement Income

Sources of Aggregate Income for Ages 65 and Older (latest data available)


Where do I go from here?

?


Your Options

Leave your money where it is

Take it in cash

Roll it into another plan or an IRA


Option 1: Remain in Your Plan

Advantages Convenience

Tax-deferred growth

Disadvantages Inability to contribute

Limited investment options

Additional record keeping

Possible restrictions


Option 2: Cash Out of Your Plan

Advantages Immediate access to your money

Disadvantages Reduces retirement savings

Penalties and withholdings


*Not to be construed as tax or legal advice.

Option 2: The Cost of Cashing Out

Plan Assets $50,000

20% IRS Withholding $10,000

FUTURE TAX ASSUMPTIONS

10% IRS Penalty $5,000

28% Federal Taxes $3,650

10% State Income Tax $5,000

Net after taxes and penalties* $26,350


Option 3a: Rollover to Another Plan

Advantages Convenience

Tax-deferred growth

Consolidated Reporting

Disadvantages Limited options

Accessibility


Option 3b: Indirect Rollover to an IRA

Advantages Access to your money

Tax-deferred growth

Exempt from penalty


Option 3b: Indirect Rollover to an IRA

Disadvantages 20% IRS withholding

- You pay the 20%

- You wait to receive a refund

Penalty if you miss the 60-day window


Option 3b: Indirect Rollover Costs

Plan Assets $50,000

20% IRS Withholding $10,000

10% IRS Penalty $0

28% Federal Taxes $0

10% State Income Tax $0

You invest distribution $40,000Plus your own money $10,000



You are ahead $138,033 by opting for the Direct Rollover over cashing out.

Not to be construed as tax or legal advice. Does not take into account fees and expenses associated with investments, nor does it consider the impact of taxes. Had these been reflected, overall would be lower.

Assumptions:

Plan assets: $50,000

Tax rate: 28%

Annual return: 8%

$50,000 $31,000

$95,015

Option 3c: Consider a Direct Rollover

$233,048

DirectRollover

Cash Outof Plan

In 20 Years


Advantages of IRAs

Tax-deferred growth

Multiple investment options

Flexibility


IRA Withdrawals

Ordinary tax rate applies

Required at age 701/2

10% early withdrawal fee if under age 591/2


72(t) Distribution: The IRA Advantage

Payments Until 591/2 (minimum 5 years)

Paid at least annually

Equal payment amount

Calculations Life expectancy

Amortization

Annuitization



How 72(t) Could Work for You

Financial Goals $2,000 monthly income

Grow investment

Protect retirement savings


A 72(t) Distribution Plan


Clear solutions in a complex world.®

Mutual Funds

Managed Accounts

Life Insurance

Variable & Fixed

Annuities

Retirement Plans

Mutual funds and variable insurance products are sold by prospectus only. Investors should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The prospectus contains this and other important information about the investment company. Please request a prospectus from your advisor and read it carefully before investing or sending money.


Benefit from Professional Advice


Seminar Developed by Lincoln Financial Distributors, Inc.

This information should not to be construed as tax or legal advice. You may wish to consult a tax advisor regarding this presentation as it relates to your personal circumstances.

Not a deposit. Not FDIC insured. Not insured by any federal government agency. Not guaranteed by any bank or savings association. May go down in value.

Lincoln Financial Distributors, Inc., a broker/dealer and member SIPC, is the financial intermediary distributor for Lincoln Financial Group. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.

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take charge of your money when you leave your job lfd0405-0574 [presenter's name]...

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