A:

The money in your profit-sharing account will be taxable when it is withdrawn from the account. You may leave the money in the plan (if the plan allows it) or roll over the balance to an IRA.

Most financial planners would recommend that you do not leave the funds in the profit-sharing plan after you leave the firm, as you run the risk of losing track of the funds. (To learn more, see Keeping Track Of Your Assets and Moving Your Plan Assets?.) Furthermore, IRAs usually allow more estate-planning flexibility than qualified plans (such as the profit-sharing plan).


This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. How can I get a "pensionado" visa to retire in Costa Rica?

    Find out how to apply for a pensionado retirement visa for Costa Rica, how to prove your income and obtain a certificate ...
  2. What option strategies can I use to earn additional income when investing in the ...

    Discover how risk-averse investors need to build a retirement portfolio. The major factors are diversification and avoiding ...
  3. What documents I need to transfer an IRA/SEP/SIMPLE to a Traditional IRA?

    Most firms require that you complete their account transfer request form, which they use to request the transfer of assets ...
  4. Is there a limit on how much I can move from my IRA to my Roth IRA?

    There is no limit on the amount that can be converted from your Traditional IRA to your Roth IRA. As you may already know, ...
RELATED TERMS
  1. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...
  2. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  3. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  4. Stretch IRA

    An estate planning concept that is applied to extend the financial ...
  5. IRA Transfer

    The transfer of funds from an Individual Retirement Account (IRA) ...
  6. IRA Asset Will

    A document that specifies how the assets in an individual retirement ...

You May Also Like

Related Articles
  1. Retirement

    How to Battle Inflation During Retirement

  2. Professionals

    Why the Government Favors Index Funds

  3. Retirement

    Top 10 Stocks for Retirement Portfolios

  4. Retirement

    How To Start Saving For Retirement

  5. Retirement

    Analyzing The Best Retirement Plans ...

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!