Updated Wednesday, October 22, 2014 as of 11:43 AM ET

CDs Fashionable Again for Low-Risk Yield: Wednesday's Retirement Scan

Our daily roundup of retirement news your clients may be thinking about.

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Comments (1)
CNBC should have qualified its comment. If the employee is under 54, then the rollover from the 401-K to their own IRA is probably the best move so that they can control their investments, and diversify them as well. Also, he can then consider supplementing his cash flow by setting up a SEPP 72-T Plan ( "Substantially Equal Periodic Payment" plan) which will avoid the 10% early distribution penalty if done properly.

HOWEVER, if the employee "separates from service", voluntarily or involuntarily, and will be 55 by 12/31, then he should ask if the company 401-K plan allows him to continue in the company plan, and to take "partial distributions" as needed. If so, then the employee can avoid the 10% penalty on any withdrawals that he takes before age 59 1/2. ( Once he rolls a 401-K into an IRA he loses that ability.)

In addition, I would have also mentioned that he should check with his company to see about NUA (Net Unrealized Appreciation in Employer Company Securities in the plan). If
applicable, this could save him significant taxes and provide complete flexibility if the company stock value had increased significantly since they were purchased in the plan, in accordance with the IRS provisions concerning NUA distributions. Again, once he transfers these securities to an IRA, or sells them within the plan, then he loses the benefit of this provision.
Posted by DAVID L Z | Wednesday, July 16 2014 at 1:37PM ET
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