New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

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

Healthcare Provider Update: Provides medical, dental, vision, fertility assistance, FSAs/HSAs, and mental health support, plus generous parental leave and wellness stipends 8. With ACA subsidies set to expire, Lyfts benefits package offers strong protection against rising healthcare costs, especially for employees with dependents or chronic care needs. Click here to learn more

Choosing an IRA rollover means that your money remains tax-advantaged and capable of growth, as in a Lyft-sponsored plan. You may also gain more investment options than what may have been available in your Lyft-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.'

brown rocky mountain beside blue sea during daytime

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 Lyft-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 Lyft should make before rolling over their money into an IRA, these include:

Internal management fees might be higher than in a Lyft-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 Lyft-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 Lyft.

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

Featured Video

Articles you may find interesting:

What type of retirement savings plan does Lyft offer to its employees?

Lyft offers a 401(k) retirement savings plan to help employees save for their future.

Does Lyft match employee contributions to the 401(k) plan?

Yes, Lyft provides a company match for employee contributions to the 401(k) plan, helping to enhance their retirement savings.

What is the eligibility requirement for Lyft employees to participate in the 401(k) plan?

Lyft employees are typically eligible to participate in the 401(k) plan after completing a specified period of employment, usually within the first year.

Can Lyft employees choose how much to contribute to their 401(k)?

Yes, Lyft employees can choose their contribution amount, up to the IRS annual contribution limits.

What investment options are available in Lyft's 401(k) plan?

Lyft's 401(k) plan offers a variety of investment options, including mutual funds, index funds, and other investment vehicles to suit different risk tolerances.

How often can Lyft employees change their 401(k) contribution amounts?

Lyft employees can change their 401(k) contribution amounts at regular intervals, typically on a quarterly basis or as specified by the plan.

Is there a vesting schedule for the company match in Lyft's 401(k) plan?

Yes, Lyft has a vesting schedule for the company match, meaning employees must work for a certain period before they fully own the matched funds.

Can Lyft employees take loans against their 401(k) savings?

Yes, Lyft allows employees to take loans against their 401(k) savings, subject to specific terms and conditions outlined in the plan.

What happens to my 401(k) if I leave Lyft?

If you leave Lyft, you have several options for your 401(k), including rolling it over to a new employer's plan, transferring it to an IRA, or cashing it out (though this may incur taxes and penalties).

How can Lyft employees access their 401(k) account information?

Lyft employees can access their 401(k) account information through the designated online portal or by contacting the plan administrator.