Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?

Thu, Nov 19, 2015

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Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?One of the most-asked questions we get at Barefoot Retirement is …

“Can I roll over some or all of the funds from my 401(k) or IRA or 403(b) or TSA into a Barefoot Retirement plan?

Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?

The second question is always, “What are the tax consequences if I do roll it over?”.

The answer is YES. You can roll it over.

Moving funds from a conventional tax-deferred retirement account into a Barefoot Retirement Plan is a common method people use to fund their policy.

However, it's not technically a “rollover,” since you can only do a “rollover” from one 401(k) or IRA to another.

Here's how it works …

There's no getting around paying income taxes on money you withdraw from a tax-deferred plan like a 401(k), IRA, 403(b) or TSA. However, there are ways you can potentially reduce your lifetime tax bite, as well as avoid paying the 10 % early withdrawal penalty. The specifics of how this is done depend on whether or not you've turned age 59-1/2 yet.

If you're 59-1/2 or older …

Once you're 59-1/2 or older, you can simply withdraw funds from your tax-deferred plan, pay ordinary income taxes on the amount you withdrew, and use the money to fund your Barefoot policy.

TAX TIP: If you believe tax rates are likely to go up over the long term (as most people we've surveyed believe), paying taxes on your retirement savings now makes a lot of sense.

Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?

The great news is, all of the money you take from a Barefoot policy can be accessed with NO taxes due, under the current tax law.

(To find out how much tax-free income you could take from a Barefoot Retirement plan custom-tailored to your unique situation, request your FREE Analysis here now, if you haven't already.).

TAX SAVINGS BONUS: Moving money from a government-controlled retirement plan into a Barefoot Retirement policy can also REDUCE the taxes you may owe on your Social Security benefits when you retire.

Many people are happy to discover that it's possible that up to 85 % of your Social Security benefits might be taxed when you retire.

After all, you paid into the system for a long time– shouldn't every penny of what you receive from it belong to you?

We think it should, which is another reason the Barefoot Retirement method makes so much sense!

The income you take from a Barefoot Retirement policy does NOT get counted in the IRS calculations used to determine how much of your Social Security benefit is going to get taxed.

Thus the more funds you move into a Barefoot Retirement account, the less funds will be calculated in the IRS Social Security tax calculations.

If you haven't turned 59-1/2 yet …

As you're probably aware, if you take distributions from a tax-deferred government-controlled plan before you reach age 59-1/2, the government requires you to pay income taxes on the funds you withdraw PLUS a 10 % penalty, in most cases.

There is simply no way to get around paying Uncle Sam income taxes on withdrawals from qualified accounts if you have not turned 59 1/2. However, if you believe tax rates are going up long term like we do, you'll come out ahead paying the taxes now and moving your money into a Barefoot Retirement policy.

You can access both your principal and growth in a Barefoot Retirement plan with NO Taxes Due, under current tax law.

How To AVOID Owing the 10 % Early Withdrawal Penalty …

You can avoid paying the 10 % early withdrawal penalty by taking advantage of Internal Revenue Code 72(t).

That's shorthand for a provision in the tax code that allows you to take early distributions from your retirement plan or IRA and avoid the 10 % penalty.

You can avoid that penalty as long as the distributions are made as part of a “series of substantially equal periodic payments” (or SOSEPP for short).

Once you start taking these distributions, you have to keep it going for the longer of five years or until you reach age 59-1/2.

There are three different methods you may use to determine what your withdrawals would be. Rather than spell that out here, here's a link to a list of 12 FAQ's regarding the 72(t) on the IRS' website.

Moving money from a qualified retirement plan is only one of the 8 common ways people use to free up money to fund a Barefoot Retirement Plan.

These range from restructuring debt, to reducing funding of your traditional retirement account, converting existing life insurance policies, and tapping your savings.

You can find a list of 10 great suggestions for finding the money to fund your Barefoot Retirement Plan on this page: http://barefootretirement.com/ways-to-free-up-funds-to-start-your-barefoot-retirement-plan/.

Moving some of your “safe” money into a Barefoot Retirement safe wealth-building plan can result in your dollars working much harder for you, without losing sleep.

The return our plan produces is many times greater than you can get in a CD, money market or savings account– but without the risk of stocks, real estate or other volatile investments.

The helpful people on our Barefoot Retirement team are masters at helping people restructure their finances to free up more seed money to fund a plan (or to start additional plans) that can help you reach your goals and dreams in the shortest time possible– without taking any unnecessary risk.

To find out how you could enjoy guarantees and peace of mind by adding the Barefoot Retirement method to your financial plan, request your free, no-obligation Analysis right here, if you haven't already done so.

Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?

,

Yours in prosperity,

Doyle Shuler

Barefoot Retirement

info@BarefootRetirement.com

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  • Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?
  • Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?
  • Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?
  • Can You Carry Over Your 401(k) or IRA In a Barefoot Retirement Plan?
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