WelcomeInformationProcessYour Role Sit Back – Relax – Ask Questions – Get Info – ACT! A Guide To Your Distribution Options

Welcome Information Process Your Role

Sit Back – Relax – Ask Questions – Get Info – ACT!

A Guide To Your Distribution Options


What we’ll cover today

Options

Choices you have for your money

Info

Help in making your decision

Action

What you need to do


How to make a great decision

First, evaluate your goals

Confirm your retirement goals with significant others

• When to retire

• Where to retire

• What to do in retirement (standard of living)

Answer three simple questions

Then, select the best fit for you

Simply match goals to the best choice


Evaluate your goals

1. Do you need to use the money for immediate expenses?

Yes

No


Evaluate your goals

2. Do you want to defer paying current income taxes and avoid penalties?

Yes

No


Evaluate your goals

3. Do you want more control and investment choices?

Yes

No


Select your best fit

Immediateexpenses

Defer taxes& add choice

Yourretirement savings

Goals

Best fit

Defer taxes

Rollover IRA

Rollover IRA

Cashdistribution

Cashdistribution

Currentplan

Currentplan

New employer’s plan




Immediateexpenses


Goals

Best fit Cashdistribution

Cashdistribution


Taking a cash distribution

Pros

Meets your current expense needs

May be eligible to take a partial cash distribution

Cons

20% mandatory federal tax withholding

10% early withdrawal penalty (prior to age 59½)

Taxed as ordinary income in year distributed

No more tax-deferred growth

$50,000Distribution amount

$40,000Less 20% mandatory -$10,000federal withholding

$35,000Less 10% early withdrawal penalty* -$5,000

$32,500Less additional ordinary federal -$2,500 income taxes (5%)

$29,500Less state and local income taxes (6%) -$3,000

Consider the costs

*For distributions prior to age 59½.

This is for illustrative purposes only. Tax withholding assumes a 25% federal tax rate and 6% state and local taxes. Penalties and taxes, other than mandatory withholding, are paid later; they are not taken out of your distribution. Your situation will vary.

Age 55 or over & retiring No penalty

Under age 59½, if used forextensive medical bills or disability

Penalty maybe waived

Exceptions to early withdrawal penalty



Immediateexpenses


Goals

Best fit

Defer taxes

Cashdistribution

Cashdistribution

Currentplan

Currentplan


Sticking with the current plan

Pros

Potential for tax-deferred growth continues

Retains some of your current plan’s services

Reserves ability to move to a new plan

“Potential” Cons

Access to money is based on plan provisions

Inability to make additional contributions

Assumes balance of $5,000 or more.

Earning 8% compounded monthly savings after 20 years from a $50,000 distribution

$107,284

$50,000$29,500

$246,340

Changes in tax rates and the tax treatment of earnings may impact results. You should consider your investment horizon and income tax brackets, both current and anticipated, when making an investment decision as these factors may further impact the results. This is for illustrative purposes only and not meant to represent the return of any investment option. Your situation will vary. Taxes are due on the tax-deferred account upon withdrawal.

Continue to invest tax-deferred

Take cash*

Invest in taxable account

Investment earningstaxed at 18.75% each year

Tax-deferred benefits

*Distribution taxed: 25% federal, 10% early withdrawal penalty, 6% state and local.



Immediateexpenses


Goals

Best fit

Defer taxes

Cashdistribution

Cashdistribution

Currentplan

Currentplan




Moving to a new employer’s plan

Pros


Plan may allow loans

Ability to make additional contributions

“Potential” Cons

Investments limited to those in new plan

Access to money based on plan provisions

Assumes plan accepts rollovers.



Immediateexpenses

Defer taxes& add choice


Goals

Best fit

Defer taxes

Rollover IRA

Rollover IRA

Cashdistribution

Cashdistribution

Currentplan

Currentplan




Rollover IRA

Pros


Expand investment options

Control access to your savings

Reserve ability to move to a new employer’s plan

Cons

No loans available

Pay annual account fees, if applicable

Direct Rollover IRA

Check made payable to new IRA custodian

No immediate tax consequences

Two-step process

Complete your plan distribution form and select the direct rollover option

Complete an IRA rollover application for the receiving financial institution

A direct rollover can be processed at any time

*The 60-day rule will apply with an indirect rollover to an IRA.


Frequently asked questions

Can I take a partial cash distribution?

What if I have an outstanding loan?

What about my company stock?

Do I need to make a decision right away?

There is no deadline to make a decision with your plan assets, unless:

• You have an outstanding loan balance

• Your account balance is less than $5,000

How should I invest?


What do I do now?

If you’re taking a cash distribution

Contact your plan provider to initiate a distribution

If you’re sticking with your current plan

In most cases, no action is required


What do I do now?

If you’re moving to a new employer’s plan

Make sure your new plan accepts rollovers

Contact your current plan provider to initiate a distribution.

Contact your new plan provider to initiate a rollover.

If you’re doing a direct rollover to an IRA

Complete your plan distribution form and select the direct rollover option

Complete an IRA rollover application for the receiving financial institution


In summary…

Evaluate your goals

Don’t forget the “cost” of distributions

Select the best fit

Keep on track for a successful future

Make your move

Let us help you every step of the way

No action is required if you decide to leave your balance in the current plan, unless:

• You have an outstanding loan

• Your account balance is less than $5,000

Call 1-800-638-7780 to request a prospectus, which includes investment objectives, risks, fees, expenses, and other information that you should

read and consider carefully before investing.

T. Rowe Price Investment Services, Inc., Distributor.

Documents

WelcomeInformationProcessYour Role Sit Back – Relax – Ask Questions – Get Info – ACT! A Guide To Your Distribution Options