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Choosing an IRA rollover means that your money remains tax-advantaged and capable of growth, as in a Constellation Brands-sponsored plan. You may also gain more investment options than what may have been available in your Constellation Brands-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.
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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 Constellation Brands-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 Constellation Brands should make before rolling over their money into an IRA, these include:
- Internal management fees might be higher than in a Constellation Brands-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 Constellation Brands-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 Constellation Brands.
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 type of retirement savings plan does Constellation Brands offer to its employees?
Constellation Brands offers a 401(k) retirement savings plan to help employees save for their future.
Does Constellation Brands match employee contributions to the 401(k) plan?
Yes, Constellation Brands provides a matching contribution for eligible employees who participate in the 401(k) plan.
What is the maximum contribution limit for the Constellation Brands 401(k) plan?
The maximum contribution limit for the Constellation Brands 401(k) plan aligns with IRS guidelines, which can change annually.
Are there any vesting schedules for the Constellation Brands 401(k) matching contributions?
Yes, Constellation Brands has a vesting schedule for matching contributions, which determines how much of the employer match you own based on your years of service.
Can employees of Constellation Brands take loans against their 401(k) savings?
Yes, employees may have the option to take loans against their 401(k) savings, subject to the plan's rules and limits.
What investment options are available in the Constellation Brands 401(k) plan?
The Constellation Brands 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.
How can employees at Constellation Brands enroll in the 401(k) plan?
Employees can enroll in the Constellation Brands 401(k) plan through the company's HR portal or by contacting the HR department for assistance.
Is there an automatic enrollment feature in the Constellation Brands 401(k) plan?
Yes, Constellation Brands may offer an automatic enrollment feature for new employees, automatically enrolling them in the 401(k) plan at a specified contribution rate.
What happens to my Constellation Brands 401(k) if I leave the company?
If you leave Constellation Brands, you can choose to roll over your 401(k) balance to another retirement account, cash out, or leave it in the plan if allowed.
Can employees at Constellation Brands change their contribution percentage to the 401(k) plan?
Yes, employees can change their contribution percentage to the Constellation Brands 401(k) plan at any time, subject to the plan's rules.
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