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Ask Dave

Roll Over Retirement Process?

Mary’s husband worked for an employee-owned company that recent sold to an out-of-state owner.  His retirement savings was cashed out in the process and she wants to know what they should do to roll it over. 


Read what Dave says:
You need to go to an Endorsed Local Provider who will help you figure out the specific investment tool you need to roll this money into. 

The first thing you need to find out is if this money you’re getting is pre-tax.  If it is, then you will have to roll it into a Roth IRA.  Just make sure you select good growth stock mutual funds within the IRA.

If the money you’re getting has already been taxed, you will be taxed 15% on the capital gains of it.  However, you will not have any 10% penalties.  You can’t roll an after-tax investment to a pre-tax investment. 

You should use this money to work your way up the baby steps.