When you make the decision to change jobs, you will also need to decide what to do with the funds in your 401(k) plan. Do you leave it in the current plan? Move it to your new company? Roll it over to an IRA?  Take some time to conduct research, evaluate your options and discuss a plan with your financial advisor.
There are pros and cons to all of the choices you can make regarding a rollover of your 401(k), and your ultimate decision should be based on your personal situation—how much you currently have invested, the new company’s plan structure and your investment goals.  Your financial advisor can help you compare your current plan with your new company’s plan to determine whether leaving your funds at your old company or taking them with you would be more advantageous. Additionally, your new company may also have a dedicated representative who can provide guidance. You also have the option of rolling over your funds to a traditional or Roth IRA.  Depending on how your current 401(k) is structured—if you’ve made Roth contributions, for example—there may be some rules regarding the specific funds that can be transferred.  Lastly, you have the option to withdraw all funds.  Due to tax implications which could cause a significant decrease in your savings, this method is generally not suggested. As always, we highly recommend discussing this with your financial advisor to determine the plan that best suits your needs.  
Once you have made the decision about where you will be moving the funds in your current 401(k) plan, you’ll want to look into whether to do a direct or indirect rollover. With a direct rollover, your funds will be transferred directly from one trustee to another.  This means that your old company will send the funds to your new company or IRA, and no money will be withheld for taxes.  Because this tends to be the most seamless process and has no tax penalty, most financial advisors would recommend doing a direct transfer. If you prefer to have a distribution check made out and sent to you personally, after which you will manage the rollover of funds to your new company’s plan or an IRA, this is considered an indirect rollover. It’s important to note that because you will technically have use of the funds before they are deposited in the new account, your 401(k) plan is required to withhold 20% of your funds for federal income taxes; however, you are still responsible for redepositing the full amount that was in your 401(k), and the 20% that was withheld will then be returned to you as a tax credit.  In addition, you must conduct your rollover within 60 days, or it will be seen as an early withdrawal and is subject to additional taxes. For example, if your 401(k) is worth $5,000 and you received a check for $4,000 (funds minus 20% withholding), you must still redeposit the full $5,000 within 60 days and that $1,000 that was withheld will count as a tax credit.  
Now that the hard work is done, you can request a distribution form from your current employer.  Once the paperwork is completed, they can start the transfer of funds whether through a direct or indirect rollover to your account of choice. If you’ve chosen to rollover to a traditional or Roth IRA, but don’t currently have one set up, you may need to work with your financial advisor to open that account before your funds can be transferred.  
Putting your funds to work as soon as possible allows your funds to begin earning and compounding more quickly.  There are seven rules that pro-active employees follow with their 401(k) investments to help maximize their returns including taking advantage of a company match and diversification. Entrusting Howard Capital Management, Inc. as Your Money Manager Hiring a well-versed money manager/financial advisor can be one of the most beneficial choices that you, as an investor, can make. At Howard Capital Management, Inc. (HCM), we understand how important it is to work with someone you trust, that will create and deliver on a personalized plan that has your best interest in mind.  HCM’s knowledge, experience and proprietary technology will provide you with a financial support system that you can rely on.   Contact Howard Capital Management, Inc. By planning for your financial future now, you can make your retirement an exciting and smooth transition. Receive guidance and have your questions answered by contacting Howard Capital Management, Inc. (HCM) to find an advisor in your area.


This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice. Howard Capital Management, Inc. may maintain long or short positions in the financial instruments referred to and may transact in them as principal or agent. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. Our proprietary indicator, the HCM-BuyLine®, identified changes in the market trend. Buys and sells may or may not have occurred on the exact dates shown. These dates do not necessarily reflect transactions applied to every individual account. Also, certain products, custodians and portfolios may have a delay in execution. When the HCM-BuyLine® indicates a bull market, HCM then identifies the particular mutual funds, ETFs or individual stocks that we believe have the best return potentials in the current market from the universe of assets available in each given program and invests in them. When the HCM-BuyLine® indicates a bear market, HCM moves clients’ investments to less risky alternatives. Not every HCM-BuyLine® buy and sell will result in a profitable trade. There will be times when following the indicator results in a loss. However, there have been situations in the past in which HCM reduced clients’ exposure to equities during market downturns by following an HCM-BuyLine® signal, thereby preserving capital. Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Howard Capital Management), made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Therefore, no current or prospective client should assume that the future performance of any specific investment or investment strategy will be equal to past performance level or that it will match or outperform any particular benchmark.  Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Howard.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. To the extent permitted by law, Howard Capital Management, Inc. does not accept any liability arising from the use of this communication. A copy of Howard’s current written disclosure statement discussing our advisory services and fees are available on our website http://www.howardcm.com. LASS.102820 HCM.102820.50