Wealth Planning - Retirement: Transitioning from work
Retirement: Transitioning from Work

For many, transitioning from work to retirement is a joyous time. But it can also be a time of tremendous fear, stress and financial pitfalls if not handled correctly. At this stage, the biggest questions many people have are:

  • When should I take Social Security?
  • How do I rollover my retirement assets?
  • How can I convert my retirement savings to income?
  • How can I minimize taxes?
  • How much income can I safely take from my retirement assets?

One important concept for people who are transitioning from work to retirement to understand is the difference between a direct rollover and a 60-day rollover.

A Direct Rollover occurs when you take money out of an employer’s retirement plan and have the plan administrator make the check directly payable to the new IRA custodian.

A 60-day Rollover occurs when you take money out of either an IRA or employer’s retirement plan and have the check made payable directly to you. In that case, you have 60 days to deposit the funds into an IRA or retirement plan.

Why is this important? If you take money out of an employer’s retirement plan and have the check made payable to you in a 60-day rollover, the employer is required to withhold 20% of the distribution for taxes, meaning the check you receive will be for only 80% of the amount distributed. You then have 60 days to deposit 100% of the distributed amount into an IRA or retirement plan to avoid taxes and potential penalties. Because you received a check for only 80% of the funds, that means you will have to come up with other funds to cover the 20% that was withheld in order to roll over the full amount of the distribution.*

Because the world of IRA transfers, rollovers and direct rollovers can be confusing, many people find it helpful to work with a financial advisor. If you would like assistance managing your retirement transition, please call us at (805) 988-2151 ext. 5710 or complete the form on this page to schedule an appointment with one of our advisors.

The information presented here is for educational purposes only and should not be considered financial, tax or investment advice. Please consult a qualified professional.

*https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions


Non-deposit investment advisory products and services are offered through CuVantis Wealth Planning, LLC, (“CuVantis”), a California Registered Investment Advisor. Credit Unions have contracted with CuVantis to make non-deposit investment advisory products and services available to credit union members.  Investments offered through CuVantis are not federally insured, are not guarantees or obligations of the credit unions, and may involve investment risk including possible loss of principal.  Investment Representatives are registered as Investment Adviser Representatives of CuVantis. Advisory services are only offered to clients or prospective clients where CuVantis and its representatives are properly licensed or exempt from licensure.

For a complete description of investment risks, fees and services, please review the CuVantis firm brochure (ADV Part 2A) which is available from your Investment Advisor Representative or by contacting CuVantis at info@cuvantis.com or (619) 535-7680.  Additional information about CuVantis is also available on the SEC’s website at www.adviserinfo.sec.gov.

Check the background of your financial professional on FINRA’s BrokerCheck or at www.adviserinfo.sec.gov