What do I Need to Know Before Transferring Investments?

There are numerous options available for workers attempting to save for retirement or capitalize on investments, ranging from life insurance to pension plans to annuities.

Keeping these investments intact while changing jobs, on the other hand, can be difficult, according to a FOX Business News report. Experts advise against cashing out a 401(k) because those under the age of 59 1/2 will face an early withdrawal penalty in addition to taxes.

Rolling it into an IRA can help a consumer avoid these penalties, while investing in an annuity is one way to guarantee future income. Variable and fixed annuities offer different opportunities for growth, with the former reacting directly to market conditions. However, some annuities provide peace of mind that pension plans do not.

“The one thing that this does for you is provide a guarantee that you can’t get anywhere else,” said Jeff Rose, a certified financial planner. “For some people, they don’t care how much they have to pay – they want a guarantee.”

According to an American Academy of Actuaries report, lifetime annuities can help consumers avoid longevity risk, which occurs when they outlive their retirement savings. They are also urging Congress to commit to addressing the security of federal programs like Medicare and Social Security in 2014.

“The president is seeking to make 2014 a ‘year of action,’ and there are few matters in Washington more often missing from everyone’s to-do list than federal entitlement reforms. The American Academy of Actuaries is the U.S. actuarial profession’s voice for serving the public and we are highlighting a fundamental choice: Take action to address solvency and sustainability issues now, or delay action and face a dwindling number of available policy options later — options that may have a more severe impact on beneficiaries and taxpayers,” says Tom Terry, president of the Academy. “While the scope of, and possible solutions to, the financial challenges vary according to program, a basic fact remains that challenges will grow more unmanageable the longer they remain unattended.”

The American Academy of Actuaries is a professional organization with 17,500 members whose mission is to serve the public and the actuarial profession in the United States. The Academy provides leadership, objective expertise, and actuarial advice on risk and financial security issues to public policymakers at all levels. The Academy also establishes standards for actuaries’ qualification, practice, and professionalism in the United States.

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