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What are Roth contributions?

Roth contributions are salary reduction contributions made to the plan that are made on an after tax basis (the income and gains that are earned on Roth contributions are not taxed).

Where can I set up an IRA?

IRA’s can be set up at almost any bank, or at most brokerage houses (e.g.: Schwab, Fidelity, Vanguard, E-Trade, UBS, etc.)

Can I leave my retirement plan account balance in my previous employer’s plan after I terminate my employment?

Most plans will allow you to leave your vested balance in the plan if your vested account balance is greater than $5,000.  However, the Summary Plan Description will dictate the exact vested balance that will allow you to leave your balance in the plan.

What are the tax implications if I cash out my account?

There will be a mandatory 20% federal withholding on any cash distribution over $200.00.  State withholding, however, is optional.  You may choose to have state withholding taken at the time of the distribution or you may choose to take care of state taxes at the end of the year when you file your tax return.  You may also elect additional federal withholding, if desired, at the time of distribution.  In addition, you may be subject to another 10% federal tax on the distribution amount and any additional state taxes that may apply based on where you live (i.e.; California may have an additional 2.5% penalty tax).

How do I sign up for direct deposit?

By completing the Direct Deposit Authorization Form that can be downloaded from https://www.pensiondynamics.com/resources/forms and following the instructions on the form.

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