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Is a Rollover into an IRA the Right Move for You as a CMS Energy Employee?

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Choosing an IRA rollover means that your money remains tax-advantaged and capable of growth, as in a CMS Energy-sponsored plan. You may also gain more investment options than what may have been available in your CMS Energy-sponsored plan. You may also gain oversight of managing these important retirement assets from your trusted Advisor.

If you roll your retirement plan assets over into an IRA account that you already own through your Advisor, you also receive the benefit of combined statements and holistic investment planning, making it easier to track your overall financial situation.

'Receive the benefit of combined statements and holistic investment planning, making it easier to track your overall financial situation.'

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Some of the benefits of rolling your money into an IRA include:

Tax-deferred growth potential: This generally avoids current income tax and distribution penalties when removed from a CMS Energy-sponsored retirement plan.

More investment choices: This allows for additional contributions, if eligible. IRAs can be combined and handled by one provider, thereby reducing trustee costs and consolidating statements. Protection from creditors in federal bankruptcy proceedings. The combined amount of your required minimum distributions (RMDs) can be taken from any of your Traditional, SEP or SIMPLE IRAs.

However, there are also some important considerations that CMS Energy should make before rolling over their money into an IRA, these include:

Internal management fees might be higher than in a CMS Energy-sponsored retirement plan.
Fees and expenses depend largely on the investments you choose.
Loans from an IRA are not allowed.
Early distributions may be subject to a 10% IRS tax penalty in addition to income tax.
RMDs begin April 1 following the year you reach 70½ and annually thereafter; leaving the money in the former Fortune-500 plan may allow RMDs to be delayed until separation from service.
IRAs are subject to state laws governing malpractice, divorce, creditors (outside of bankruptcy), and other lawsuits; leaving the money in the former CMS Energy-plan may provide additional protection against creditors.
Net unrealized appreciation (NUA) is the difference between what you paid for employer securities and their increased value. You lose favorable tax treatment of NUA if the funds are rolled into an IRA.

Hopefully, these insights will be helpful as you plan your retirement from CMS Energy.

For more information about this topic, view our e-book here: https://retirekit.theretirementgroup.com/will-your-retirement-plan-retire-with-you-e-brochure-offer

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What is the CMS Energy 401(k) Savings Plan?

The CMS Energy 401(k) Savings Plan is a retirement savings plan that allows employees to save a portion of their salary on a tax-deferred basis.

How can I enroll in the CMS Energy 401(k) Savings Plan?

Employees can enroll in the CMS Energy 401(k) Savings Plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.

What are the contribution limits for the CMS Energy 401(k) Savings Plan?

The contribution limits for the CMS Energy 401(k) Savings Plan are determined by the IRS and may change annually. Employees should check the current limits for the specific year.

Does CMS Energy offer a company match for the 401(k) Savings Plan?

Yes, CMS Energy offers a company match for employee contributions to the 401(k) Savings Plan, helping to enhance the overall savings for retirement.

When is the best time to start contributing to the CMS Energy 401(k) Savings Plan?

The best time to start contributing to the CMS Energy 401(k) Savings Plan is as soon as you are eligible, as early contributions can significantly impact your retirement savings over time.

Can I change my contribution percentage in the CMS Energy 401(k) Savings Plan?

Yes, employees can change their contribution percentage at any time by accessing their account through the CMS Energy HR portal.

What investment options are available in the CMS Energy 401(k) Savings Plan?

The CMS Energy 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles, allowing employees to choose based on their risk tolerance.

How often can I make changes to my investments in the CMS Energy 401(k) Savings Plan?

Employees can make changes to their investment allocations in the CMS Energy 401(k) Savings Plan on a regular basis, typically quarterly or as specified in the plan documents.

What happens to my CMS Energy 401(k) Savings Plan if I leave the company?

If you leave CMS Energy, you have several options for your 401(k) Savings Plan, including rolling it over to an IRA, transferring it to a new employer's plan, or cashing it out, though cashing out may have tax implications.

Is there a loan option available in the CMS Energy 401(k) Savings Plan?

Yes, the CMS Energy 401(k) Savings Plan may allow employees to take loans against their account balance, subject to specific terms and conditions outlined in the plan.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

CMS Energy announced a restructuring plan that includes significant layoffs affecting their operations in Michigan. The company also mentioned potential changes to employee benefits and pension plans as part of cost-cutting measures.