What are Securities and Annuities, and How Do They Affect My Rollover?

Securities: These are investments like company stocks, bonds, and mutual funds that can be held within your 401(k). They represent ownership in a company or a debt owed to you.

Annuities: These are contracts with insurance companies. You make payments into the annuity, and in return, the insurance company provides you with regular payments in the future, usually during retirement.

How they can complicate rollovers:

While securities and annuities can be valuable components of your retirement savings, they can sometimes present challenges when you're trying to roll over your 401(k) to a new account. Here's why:
      1. Transfer restrictions: Some securities or annuities may have restrictions on when and how they can be transferred. This could delay your rollover or require additional steps.
      2. Valuation complexities: Determining the exact value of certain securities or annuities at the time of rollover can be complicated, especially if they are not publicly traded.
      3. Tax implications: Rolling over securities or annuities can have tax implications, especially if they involve pre-tax and after-tax contributions.

      4. Potential surrender charges: Some annuities may have surrender charges if you withdraw money before a certain period. These charges could apply if you try to roll over the annuity.

        What to do:

What to do

Carefully review the rules and restrictions regarding securities and annuities in your 401(k) plan documents. Manifest User Transfer Specialists are here to support you as you go through this process. During our call with your provider, we will first address all your questions and learn about the rollover process specific to your plan. We can also assist you in reaching out to your plan administrator for guidance where needed.

Key takeaway:

Don't let securities and annuities deter you from rolling over your 401(k)! By understanding the potential challenges and taking the necessary steps, you can ensure a smooth and successful rollover.

The frequently asked questions, or FAQs, are intended to be helpful and to get you thinking in a more sophisticated manner about your account transfer and related issues. However, these are not meant for accounting, tax, finance, or legal advice, not intended to be exhaustive, and do not create any relationship or duty on our part to assist your particular situation. We offer no warranties on the accuracy or completeness of the information as there could be developments of any kinds, including, but not limited to, any changes in relevant laws and regulations.