When you retire or change jobs, you may be faced with the decision about what to do with your qualified retirement plan assets. A number of options may be available to you, including rolling over the distribution to a Traditional IRA, or leaving the assets with your former employer, if permitted. By moving eligible rollover distribution assets to an IRA (or other qualified plan), or leaving the assets with your former employer, your money can continue to grow tax-deferred until you begin withdrawing it, when it will be taxed as ordinary income. If you do not roll the assets over, and decide to take the funds as a lump sum, there are some disadvantages to this option to consider, including:

• Mandatory 20 percent tax withholding
• Possible 10 percent premature distribution penalty if you are under age 59 1⁄2
• Ordinary income taxes due currently on the taxable portion of the entire distribution.

Your distribution assets can be rolled into a newly opened IRA or one that you already own. You may also be able to roll the assets to a new employer’s plan. See a tax professional, financial advisor, or benefits specialist for more information on rollover IRAs and other qualified plan distribution options.