401k Rollover Key Terms

Know 401(k) rollover key terms to make sound decisions about your retirement investments

401(k) rollover consultation is a cost-effective way to expand the services you provide to employees that will boost their morale but not stretch your budget. Provide advice on what to do with their 401(k) funds. Make sure the advice comes from professionals and doesn’t require any financial expertise to understand. Rather than putting this advice into glossy pamphlets, design a PowerPoint presentation explaining basic concepts about 401(k) options. You can start by defining the following key terms.

Related Reading: Get the 401(k) Gloassary of Key Terms.

401(k) rollover investments

401(k) rollover investment refers to all the financing options that are available, from the pitfalls that holders should avoid to borrowing from their accounts and making early withdrawals.

Consultation

Emphasize to your 401(k) holders that they should seek consultation with a professional retirement planner before making any 401(k) rollover decisions. Consultants can help them complete forms, discuss their retirement goals and walk them step by step through the entire rollover process.

Traditional IRA

Sometimes called the rollover IRA, the traditional IRA is a fund that depends on money from retirement or pension plans.

Employer contributions

While the term employer contributions seems self-explanatory, make sure employees understand these contributions are made to entice employees to stay with the company.

Minimum required distributions

The term minimum required distributions refers to the laws requiring holders to withdraw money once they've reached a certain age.

20% withholding requirement

The 20% withholding requirement comes into play when the employer pays an eligible rollover distribution from the plan.

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