Individuals have four basic choices with the 401(k) account they accrued at a previous employer.

One of the common threads of a mobile workforce is that many individuals who leave their jobs are faced with a decision about what to do with their 401(k) account.¹

Individuals have four choices with the 401(k) account they accrued at a previous employer.2

Choice 1: Leave It with Your Previous Employer

You may choose to do nothing and leave your account in your previous employer’s 401(k) plan. However, if your account balance is under a certain amount, be aware that your ex-employer may elect to distribute the funds to you.

There may be reasons to keep your 401(k) with your previous employer —such as investments that are low-cost or have limited availability outside of the plan. Other reasons are to maintain certain creditor protections that are unique to qualified retirement plans or to retain the ability to borrow from it if the plan allows for such loans to ex-employees.3

The primary downside is that individuals can become disconnected from the old account and pay less attention to the ongoing management of its investments.

Choice 2: Transfer to Your New Employer’s 401(k) Plan

Provided your current employer’s 401(k) accepts the transfer of assets from a pre-existing 401(k), you may want to consider moving these assets to your new plan.

The primary benefits of transferring are the convenience of consolidating your assets, retaining their strong creditor protections, and keeping them accessible via the plan’s loan feature.

If the new plan has a competitive investment menu, many individuals prefer to transfer their account and make a full break with their former employer.

Choice 3: Roll Over Assets to a Traditional Individual Retirement Account (IRA)

Another choice is to roll assets over into a new or existing traditional IRA. It’s possible that a traditional IRA may provide some investment choices that may not exist in your new 401(k) plan.4

The drawback to this approach may be less creditor protection and the loss of access to these funds via a 401(k) loan feature.

Remember, don’t feel rushed into making a decision. You have time to consider your choices and may want to seek professional guidance to answer any questions you may have.

Choice 4: Cash out the Account

The last choice is to simply cash out of the account. However, if you choose to cash out, you may be required to pay ordinary income tax on the balance plus a 10% early withdrawal penalty if you are under age 59½. In addition, employers may hold onto 20% of your account balance to prepay the taxes you’ll owe.

Think carefully before deciding to cash out a retirement plan. Aside from the costs of the early withdrawal penalty, there’s an additional opportunity cost in taking money out of an account that could potentially grow on a tax-deferred basis. For example, taking $10,000 out of a 401(k) instead of rolling over into an account earning an average of 8% in tax-deferred earnings could leave you $100,000 short after 30 years.5

1. In most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73. Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty.
2. FINRA.org, 2026
3. A 401(k) loan not paid is deemed a distribution, subject to income taxes and a 10% tax penalty if the account owner is under 59½. If the account owner switches jobs or gets laid off, any outstanding 401(k) loan balance becomes due by the time the person files his or her federal tax return.
4. In most circumstances, once you reach age 73, you must begin taking required minimum distributions from a Traditional Individual Retirement Account (IRA). Withdrawals from Traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. You may continue to contribute to a Traditional IRA past age 70½ as long as you meet the earned-income requirement.
5. This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Retirement choices can feel intimidating. Choosing the right strategy can make all the difference.

As a small-business owner, figuring out retirement choices can be a little intimidating. How do you pick the most appropriate retirement plan for your business as well as your employees?
There are a number of choices when creating retirement plan strategies for you and your employees. Here, we will review three of the most popular for small businesses: SIMPLE-IRAs, SEP-IRAs, and 401(k)s. Read on below to learn more about each type of retirement plan.

This article is for informational purposes only and is not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before implementing or modifying a retirement plan.

SIMPLE-IRAs. SIMPLE stands for Savings Incentive Match Plan for Employees. This is a traditional IRA that is set up for employees and allows both employees and employers to contribute. If you’re an employer of a small business who needs to get started with a retirement plan, a SIMPLE-IRA may be for you. SIMPLE-IRA’s provide some degree of flexibility in that employers can choose to either offer a matching contribution to their employees’ retirement account or make nonelective contributions. In addition, employees can choose to make salary reduction contributions to their own retirement account. Some small business owners opt for a SIMPLE-IRA because they find the maintenance costs are lower compared with other plans.1

Distributions from SIMPLE-IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions.

For a business to use a SIMPLE-IRA, it typically must have fewer than 100 employees and cannot have any other retirement plans in place.1

SEP-IRAs. SEP plans (also known as SEP-IRAs) are Simplified Employee Pension plans. Any business of any size can set up one of these types of retirement plans, including a self-employed business owner. Like the SIMPLE-IRA, this type of retirement plan may be an attractive choice for a business owner because a SEP-IRA does not have the start-up and operating costs of a conventional retirement plan. This is a type of retirement plan that is solely sponsored by the employer, and you must contribute the same percentage to each eligible employee. Employees are not able to add their own contributions. Unlike other types of retirement plans, contributions from the employer can be flexible from year to year, which can help businesses that have fluctuations in their cash flow.2

Much like SIMPLE-IRAs, SEP-IRAs are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 73, you must begin taking required minimum distributions.

401(k)s. 401(k) plans are funded by employee contributions, and in some cases, with employer contributions as well. In most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73. Withdrawals are taxed as ordinary income, and, if taken before age 59½, may be subject to a 10% federal income tax penalty.1

1. IRS.gov, 2026
2. Investopedia.com, November 27, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Is your estate in order? This short quiz may help you assess your overall strategy.

Do you have a will?

A will enables you to specify who you want to inherit your property and other assets. A will also enable you to name a guardian for your minor children.

Do you have healthcare documents in place?

Healthcare documents spell out your wishes for health care if you become unable to make medical decisions for yourself. They also authorize a person to make decisions on your behalf if that should prove necessary. These documents may include a living will, a power of attorney agreement, and a durable power of attorney agreement for healthcare.

Do you have financial documents in place?

Certain financial documents can outline your financial wishes. If you become unable to make decisions for yourself, these financial documents can be structured to empower a person to make decisions on your behalf. These documents may include joint ownership, durable power of attorney, and living trusts.

Check Box

Have you filed beneficiary forms?

In some cases, naming a beneficiary for bank accounts and retirement plans makes these accounts “payable on death” to your beneficiaries. In other cases, you will need to fill out a “Payable on Death” form.

Do you have the right amount and type of life insurance?

When was the last time you assessed your life insurance coverage? Have you compared the life insurance benefit with your financial obligations? Keep in mind that several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder may also pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Have you taken steps to manage your federal estate tax?

If you and your spouse have more than $30 million in assets (for 2026), you may want to consider taking steps to manage federal estate taxes, which will be due at the second spouse’s death.1

Have you taken steps to protect your business?

Do you have a succession plan? If you own a business with others, you may also want to consider a buyout agreement.

Have you created a letter of instruction?

A letter of instruction is a non-legal document that outlines your wishes. A strong, well-written letter may save your heirs time, effort, and expense as they administer your estate.

Will your heirs be able to locate your critical documents?

Your heirs may need access to the specific documents you have created to manage your estate. These documents may include:

  • Your will
  • Trust documents
  • Life insurance policies
  • Deeds to any real estate, and certificates for stocks, bonds, annuities
  • Information on your financial accounts and safe deposit boxes
  • Information on your retirement plans
  • Information on any debts you have: credit cards, mortgages, and loans.

Note: Power of attorney laws can vary from state to state. An estate strategy that includes trusts may involve a complex web of tax rules and regulations. Consider working with a knowledgeable estate management professional before implementing such strategies.

1. IRS.gov, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

This article examines one’s options when receiving a work bonus or other financial windfalls.

While many of us have been conditioned to expect a regular bonus from work or some other gift of money, either from living relatives or through an estate, there is still a big thrill when circumstances drop a big pile of money into your life.

In 2024, the average work bonus was roughly 2.8 percent of the worker’s annual salary, across all industries. What would you do with yours? While there’s nothing wrong with having a little fun, you may have some goals that need attention, too.1

Let’s examine your choices for your windfall.

Thinking About the Future

• Review Your Accounts — Reviewing your contributions to your personal or workplace retirement accounts is one way to prepare for the future.
• Invest — Perhaps it might be time to consider some sort of investment. We can discuss your options.
• Emergency Fund — If you don’t have one, now’s a great time to start it. If you do have one, it might be time to review.

Debt

It casts a long shadow, so it’s always nice to get a bit of sunshine instead.

• Consider Paying it Down or Off — Using your windfall to pay off any high-interest debts. The average interest rate for credit cards is somewhere around 20 percent.2

Family

If you’re raising kids, you know some things are coming up, either college or something else.

• College Plans — If saving for your child’s college education is a top priority, you may want to use part of the windfall.
• Saving and Investing — Remember that the future for your loved ones goes well beyond immediate concerns. If your priority is your family, look at the “Thinking About the Future” section again in that light.

Saving for Big Purchases

You might have a big purchase in mind. We can discuss any of them, whether they are listed here or not.

• Down Payment on a Home — Many people’s goals include home ownership. If you want to buy a home or are already well on that path, your bonus could get you on that goal.
• Vacation — You know you have one in mind! It’s the vacation to end all vacations, whether it requires a giant jet or a private yacht. Talk to me about how we can start a place to set aside money for this goal.

A windfall provides an opportunity to work toward one of your goals. I look forward to speaking with you and answering your questions about any of the options above.

1. Northwestern Mutual, February 14, 2025
2. Bankrate, August 5, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Explore how the One Big Beautiful Bill may affect taxes, deductions, and credits now and in the years ahead.

On July 4, the One Big Beautiful Bill was signed into law at a White House ceremony. This domestic policy bill extends the 2017 tax cuts set to expire this year, making some of those rules permanent. The bill also creates several new tax laws for individuals while addressing other tax issues for businesses.1,2

It might be a good time to check with your tax, legal, or accounting professional about the changes in the law. Some will start this year, while other changes will kick in in 2026. Like previous tax laws, some new rules are scheduled to expire, while others are permanent. Here’s a look at changes expected to impact most tax filers shortly.

Taxes

One key feature of the One Big Beautiful Bill Act is the extension and revision of some of the tax laws that were part of the 2017 Tax Cuts and Jobs Act (TCJA). Here’s a quick summary of the three changes we found the most interesting:

Extension of Tax Rates

The bill extends the current tax rates of the 12 percent, 22 percent, 24 percent, 32 percent, and 37 percent brackets, respectively. Had the TCJA expired, the rates would have reverted to 15, 25, 28, 33, and 39.6 percent. The sixth tax bracket stayed the same at a 35 percent tax rate.1,2

Standard Deduction

It also increased the standard deduction to $15,750 for single filers and $31,500 for those filing jointly for 2025. Both are slightly rising from the current rate. Note: The standard deduction will adjust for inflation starting next year.1,2

State and Local Tax Deduction (SALT)

The SALT will increase to $40,000 in 2025 and will increase 1 percent annually until 2030. However, in 2030, it will revert to $10,000. Note: SALT has a $500,000 threshold for single and married filers.1,2

The “Bonus” Deduction

The new “bonus” deduction for older Americans has received much attention since the One Big Beautiful Bill Act became law on July 4. Here’s what’s changing for seniors with the new bill. Starting in 2025, the bill provides a $6,000 bonus deduction for filers 65 and up in addition to the standard deduction available to all taxpayers. The new rule will also affect unmarried/non-surviving spouses. The deduction begins to phase out for individuals with incomes starting at $75,000, or joint filers with an income of $150,000. It phases out completely for individuals earning more than $175,000 and couples earning $250,000. Note: The bonus deduction ends in 2028.1,2

Child Tax Credit

Starting in 2025, the child tax credit of $2,000 will increase to $2,200. The credit also has a COLA (cost-of-living adjustment) attached.1,2

Dependent Care

The bill, which will take effect in 2026, increases the dependent care flexible spending account limit from $5,000 to $7,500. It also raises the maximum percentage of qualified expenses for dependent care from 35 percent to 50 percent.1,2

American Family Account

The government will make a one-time $1,000 payment into an account for babies born between 2025 and 2028. Note: Parents can add up to $5,000/year. No withdrawals are allowed before age 18.1,2

529 Expansion

The bill extends the 529 umbrella to cover nontuition expenses related to elementary or secondary school attendance. In addition, starting in 2026, the cap for tuition-related expenses increases from $10,000 to $20,000.1,2

New Car Loans

Between 2025 and 2028, a $10,000 deduction on new car loan interest will be available, but some limitations will apply (such as the car needing to be brand-new). First, the deduction will be reduced if your gross income exceeds $100,000, or $200,000 if you are married. The car’s final assembly must occur in the U.S. to qualify for the deduction.1,2

Electric Vehicle (EV) Subsidies

Some home improvements (such as windows) and residential energy credits (adding solar) end after December 31, 2025. EV credits for new and used cars end after September 30, 2025.1,2

Small Business Deductions

The new law permanently establishes a deduction of up to 20 percent of qualified business income for sole proprietorships, partnerships, and S-corps.1,2

100 Percent Expensing of Capital and Factory Investments

The bill restores the provision that allows businesses to expense 100 percent of capital investments made on or after January 19, 2025. However, some limitations may apply.1,2

1099-K

The new law sets the reporting limits at $20,000 and 200 transactions for transactions on cash apps. Note: The rule starts in 2025. It rolls back the $600 threshold set in previous legislation.1,2

No Tax on Tips

A new $25,000 deduction for tips starting in 2025 and ending in 2028 is part of the new law. The deduction is reduced if your gross income exceeds $150,000, or $300,000 if you are married and filing jointly. Note: The tax on tips provision is allowed, even if you take the standard deduction.1,2

No Tax on Overtime

New overtime deductions were created, starting in 2025 and ending in 2028. These comprise a $12,500 deduction (single filers) and a $25,000 deduction (married filing jointly). Note: Like no tax on tips, the deduction reduces if your gross income exceeds $150,000, or $300,000 if married filing jointly.1,2

Charitable Contribution Recordkeeping

Charitable contributions of $1,000 for individual filers and $2,000 for married couples filing jointly are now deductible, even if you don’t itemize your deductions.1,2

Estate and Gift Tax Exemption

The bill increases the estate and gift tax exemption starting in 2026. This year, it is capped at $13.99 million for single filers and $27.98 million for married filing jointly. In 2026, it will increase to $15 million for single filers and $30 million for married filing jointly. Note: The exemption will increase with inflation.1,2

A Note on Estate Management

Ever since the Tax Cuts and Jobs Act of 2017, there has been an ongoing concern that the estate and gift tax exemption would revert to the 2017 level in 2025. Although the new bill extends the rule, it may change again sometime in the future. Often, the best approach to estate management is proactive.1,2

The new bill has added complexity to the tax code, so I anticipate the IRS will issue guidelines for interpreting the updated rules later this year. Please reach out if you have any questions, and I’ll pass along any information I might have. I would also encourage you to speak with your tax, legal, or accounting professional before making any adjustments based on tax updates in the One Big Beautiful Bill.

1. CNBC.com, July 3, 2025.
2. Congress.gov, August 21, 2025.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Learn how to coordinate your retirement accounts like an orchestra to help maximize your retirement strategy.

Key Takeaways

  • Understanding the retirement savings hierarchy can help maximize your limited dollars. Many financial professionals suggest prioritizing your 401(k) first, then your Traditional IRA, and finally, your taxable savings when determining how to allocate retirement funds.
  • Coordinating investments across accounts may enhance your overall strategy. Some approaches involve placing income-generating assets like bonds in tax-deferred accounts while using taxable accounts for growth-focused investments like stocks.
  • Your withdrawal strategy can impact your retirement income. Options include tapping taxable accounts first, withdrawing from poor performers, or using a tax-bracket approach, each with different potential benefits depending on your circumstances.

An orchestra is merely a collection of instruments, each creating a unique sound. It is only when a conductor leads them that they produce the beautiful music imagined by the composer.

The same can be said about your retirement strategy.

The typical retirement strategy is built on the pillars of your 401(k) plan, your Traditional IRA, and taxable savings. Getting the instruments of your retirement to work in concert has the potential to help you realize the retirement you imagine.1

Hierarchy of Savings

Maximizing the effectiveness of your retirement strategy begins with understanding the hierarchy of savings.

If you’re like most Americans, the amount you can save for retirement is not unlimited. Consequently, you may want to make sure that your savings are directed to the highest-priority retirement funding options first. For many, that hierarchy begins with the 401(k), is followed by a Traditional IRA, and, after that, extra money is put toward taxable savings.

Heirarchy of Savings

You will then want to consider how to invest in each of these savings pools. One strategy is to simply mirror your desired asset allocation in all retirement accounts.2

Another approach is to put the income-generating portion of the allocation, such as bonds, into tax-deferred accounts while using taxable accounts to invest in assets whose gains come from capital appreciation, like stocks.3

Withdrawal Strategy

When it comes to living off your savings, you’ll want to coordinate your withdrawals. One school of thought recommends that you tap your taxable accounts first so that your tax-deferred savings will be afforded more time for potential growth.

Another school of thought suggests taking distributions first from your poorer-performing retirement accounts since this money is not working as hard for you.

Finally, because many individuals have both traditional and Roth IRA accounts, your expectations about future tax rates may affect what account you withdraw from first. (If you think tax rates are going higher, then you might want to withdraw from the traditional before the Roth). If you’re uncertain, you may want to consider withdrawing from the traditional up to the lowest tax bracket and then withdrawing from the Roth after that.4

Withdrawal Strategy

In any case, each person’s circumstances are unique, and any strategy ought to reflect your particular risk tolerance, time horizon, and goals.

 

1. In most circumstances, you must begin taking required minimum distributions from your 401(k), Traditional IRA, or other defined contribution plan in the year you turn 73. Withdrawals from your 401(k), Traditional IRA or other defined contribution plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. 401(k) plans and IRAs have exceptions to avoid the 10% withdrawal penalty, including death and disability. Contributions to a traditional IRA may be fully or partially deductible, depending on your individual circumstances.
2. Asset allocation is an approach to help manage investment risk. Asset allocation does not guarantee against investment loss.
3. The market value of a bond will fluctuate with changes in interest rates. As rates rise, the value of existing bonds typically falls. If an investor sells a bond before maturity, it may be worth more or less than the initial purchase price. By holding a bond to maturity an investor will receive the interest payments due plus his or her original principal, barring default by the issuer. Investments seeking to achieve higher yields also involve a higher degree of risk. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.
4. Roth IRA contributions cannot be made by taxpayers with high incomes. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five-year holding requirement and occur after age 59½. Tax-free and penalty-free withdrawal can also be taken under certain other circumstances, such as a result of the owner’s death. The original Roth IRA owner is not required to take minimum annual withdrawals.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.
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