Protect Your Retirement Plan

Get a copy of your most recent retirement contributions. Go over them carefully, make sure that everything you have contributed is in your account, and note your company match is included, if it is offered.

When you leave, don’t touch that money! You will have some choices. Your former company may allow you to keep the money in their plan, and your new company may allow you to bring it with you. You need to know which company has the best plan for you. Another option is to have it rolled over into your own traditional IRA. Before you make a decision, discuss this with a financial planner to help you determine what is best for you. At any rate, don’t have the money transferred directly to you. If you are not sure, leave it where it is until you have made a well-thought-out decision.

If you take the money before you are 59 1/2, you must pay the tax on the entire amount plus a 10 percent penalty for taking it out too early. There are some exceptions to this, and you should contact a financial planner, an accountant, or the IRS directly to see what the latest legislation allows and whether or not you are eligible. If you are 59 1/2 or more, you will still be responsible for the tax on the amount you withdraw but there is no penalty.

You may hear that you can have the money for 60 days and then put an equal amount into a new retirement account. If you do this, your old company will deduct 20 percent to give to the Internal Revenue Service, and you will have to claim it back on your next tax return. It isn’t worth all that paperwork unless you absolutely need to give your self a 60-day loan and you know for sure where the money will come from before the 60 days are up. There are much better ways to give yourself a loan.

Medical Benefits

Your benefits book should tell you explicitly how the company’s medical benefits work. If it is not clear to you, ask the human resources person to explain them. By law, your current employer must give you an opportunity to continue to be on their medical plan at your own expense for a determined amount of time. At this writing, the length of time for coverage is up to 18 months.

Before you take a job with another company, ask to see their benefits book. You won’t want to ask for it on the first interview; wait until they offer the job. This would be especially important if they have exclusions on pre-existing medical conditions. If you have any of those conditions, don’t take the job until you have found medical insurance for yourself.

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