- Introduction
- Lump-Sum Distribution
- Annuity Distribution
- Rollover to a Traditional IRA
- The Roth IRA - How Does It Fit In?
- Rollover to another Retirement Plan
- Mandatory Withdrawals
Your company may allow you to receive your 401(k) account balance as an annuity. Another option is to compare your company's annuity offer to a single premium immediate annuity available through an insurance company. The single premium immediate annuity must qualify as an individual retirement annuity. As long as you do a direct rollover, your 401(k) account retains its tax-deferred status.
IMPORTANT NOTE: The annuity contract must meet certain requirements to qualify as an individual retirement annuity. Check with the insurance company or your investment representative to make sure the annuity contract you purchase qualifies for a direct rollover.
Assuming all of your 401(k) contributions were made with pre-tax dollars, each payment from your company annuity, is taxable as ordinary income when received. If you made any after-tax contributions, a portion of each payment is received tax-free.*
*federally tax-free, may be subject to state and local taxes
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| Not a Bank Deposit | Not Insured by Any Federal Government Agency | |
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NHTrust is a trade name of New Hampshire Trust Company. Brokerage services are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Investment and insurance products are subject to investment risk, including the possible loss of value. Products and services made available through Osaic Institutions are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. Osaic Institutions and NHTrust not affiliated.