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Whether you’re changing jobs, following your entrepreneurial dreams or finally taking that well-earned retirement, if you have an employer-sponsored 401(k) account, you’re going to be faced with the decision of what to do with it.

Regardless of the reason, it’s important to think through the available options so that you ultimately make the most of the money you’ve been investing.

So what does that mean? Ideally, it’s best to choose a strategy that meets your retirement needs, minimizes the impact of taxes and avoids those pesky penalties. And because if you are in receipt of the rollover funds, such rollovers must be completed no later than the 60th day after the day you receive the distribution, it’s important to start thinking about it now.

Here are a few options for you to consider:

Leave it Where It is

Some employers will allow you to keep the funds in their plan until you reach the plan’s retirement age — even if you’re headed to a new job. This may be a good option for you if you want to continue to take advantage of certain investment options or managed money services available in your existing plan. Your funds will remain tax-deferred and can later be moved to a new em-ployer’s qualified plan or an IRA.

Roll It On Over

If your soon-to-be former employer requires you to move your retirement accounts out of their plan or you simply prefer to do so, another option is to directly roll your distribution into a new Individual Retirement Account (IRA) or an employer-sponsored 401(k) plan with your new employer if one is available and rollovers are permitted. Either of these options will allow you to continue to defer taxes and enable you to continue building your retirement savings for the future.

Take the Taxable Distribution

Depending on your situation, you may choose to withdraw the funds from your 401(k). Now keep in mind that although you will have immediate access to your savings, there are a few things to think about before you take a lump-sum distribution. First, your money will no longer have the potential to grow tax-deferred. Second, when you take the money, it will be subject to ordinary state and federal income taxes. Additionally, if you are under age 59½, a 10 percent IRS penalty may apply.

Please note this is a general overview, and tax laws can be tricky, so be sure to talk to an accountant and/or tax attorney before making any financial decision. You should also consult with the human resources department of the applicable employer to learn about the options available to you under your plan and any applicable fees and expenses. Consider the different fees and the different services that apply to your plan and compare them to any new options that you are considering.

To learn more, please contact Michelle (Shelly) Gams, CFP at 406-294-7527 or

This third-party educational article is provided as a courtesy by Michelle (Shelly) Gams, CFP of Retirement Solutions. Michelle (Shelly) Gams is a Financial Adviser with Eagle Strategies LLC, a Registered Investment Adviser and a Regis-tered Representative of NYLIFE Securities LLC (member FINRA/SIPC), a Licensed Insurance Agency.

Retirement Solutions is not owned or operated by Eagle Strategies LLC or its affiliates.