I participate in a profit-sharing plan at work. If I retire at age 62, will I be able to withdraw the money tax-free, or must it be rolled over to another account or plan?

By Denise Appleby AAA
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The money in your profit-sharing account will be taxable when it is withdrawn from the account.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)

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