What are the Best Tips for a Pension Rollover?

N. Madison
N. Madison

Deciding to perform a pension rollover is a big decision. Fortunately, there are many pension rollover tips that may help you make a good decision and accomplish a rollover without hassle. Among the best tips for a rollover are those that involve comparing your options and contacting your plan’s administrator for requirements. You may also do well to seek the advice of a financial advisor before you move forward. Once you decide to go forward with your rollover, however, one of the best tips involves making sure you complete it in a timely manner.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

One tip for a pension rollover is to make sure it’s a wise choice. Before you make this decision, you may do well to carefully consider your options and ensure that completing a rollover will benefit you financially. For example, if you find that rolling over your account into a 401K will give you better tax advantages, this may be a good option for you.

Speaking with a financial advisor may also help you as you make the decision to perform a pension rollover. You may share your goals and concerns with a financial advisor to help him gain an understanding of what you hope to get out of a pension rollover. He may then discuss the different types of plans available and help you compare their advantages and disadvantages. If you do not wish to discuss your plans with a financial advisor, you may also research the available plans online and make your own comparisons.

Another tip for a pension rollover is to contact the plan administrator to discuss your plans before you begin. This way, you can learn the requirements of your unique plan and avoid unnecessary confusion or delays. In most cases, you will need to reach a specific age or leave the company before you can complete a pension rollover. Each plan's rules and requirements may vary, however.

Often, tips for a pension rollover involve timeliness. In most cases, you will have 60 days to move your pension funds into a new account. If you do not accomplish this within 60 days, your pension may be considered a distribution instead. If it is considered a distribution, you may face taxes and penalties.

The easiest way to avoid missing the 60-day deadline may be to set up the new account first so that it is ready to receive the funds from your pension. Then, you can have the organizations involved handle the transfer of your funds instead of providing you with a check. If you do receive a check from your pension fun, you will typically do well to deposit it in your new account as soon as possible. This way, you can avoid penalties.

N. Madison
N. Madison

Nicole’s thirst for knowledge inspired her to become a wiseGEEK writer, and she focuses primarily on topics such as homeschooling, parenting, health, science, and business. When not writing or spending time with her four children, Nicole enjoys reading, camping, and going to the beach.

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