Understand Your Options The amount you've invested in your company's retirement plan could represent the largest asset you own. Your investment may represent years of hard-earned savings and be a sizable part of your financial support during retirement. If you are eligible to take a distribution from the plan, make sure you know your distribution options and the tax consequences involved before withdrawing money.
As you consider your options, remember the reason you chose to invest in your employer's qualified retirement plan in the first place: you know you'll need to supplement your Social Security income in order to enjoy a comfortable retirement. Distribution options such as a lump sum distribution may provide you with cash today, but will likely sabotage your longer-term retirement strategy. Other options, such as rolling your assets into an IRA will trigger no tax consequences and will allow you to continue enjoying the benefits of tax-deferred growth.