Tax laws keep changing, and for anyone who has been in the business for a while you understand that change means opportunity. Opportunity to educate and an opportunity to provide service. Right now there is a great opportunity for IRA rollovers. EGTRRA (and now PPA 2006) allow IRA rollovers into qualified plans. This is an opportunity to roll over ANY IRA funds into a qualified plan. This could be a huge opportunity for your clients. Why?
Rolling IRA Funds Into a Qualified Plan Means:
- The funds are available for loans– For the first time ever, this also includes sole-proprietors, partners and Sub-Chapter S shareholders
- Funds withdrawn from a qualified plan are not subject to a 10% penalty if withdrawn after age 55 if there is a separation from employment – There is not the need to wait until age 59 1/2 to avoid the penalty like there is in an IRA or tax sheltered annuity.
- Qualified funds are protected from bankruptcy – this may be reason enough for a rollover in a state where IRA funds are not protected from creditors.
- In a qualified plan, there is often more investment opportunities than exist in the IRA – More options mean more chances to give your client what he wants.