Your immediate options for your money

You can choose any one of the following options. If you don’t make a choice, your balance will remain in the plan until you request a final distribution. Any earnings will continue to accumulate tax-deferred. The IRS requires that you begin taking distributions when you reach age 73.

• Directly roll over your savings. By rolling over your plan balance to an IRA or another employer’s eligible plan, you can keep your money tax-deferred. When you choose a Vanguard IRA^® for your rollover, you can invest in funds currently offered by your plan as well as many other funds. You can roll over a portion of your plan money to an IRA or employer’s eligible plan and choose another option for the remaining balance.
  
  Whether you keep your money where it is, move it to an IRA, or move it to another employer’s plan depends on your situation and preferences. Some things to consider are available investments and services, fees and expenses, and protection from creditors. Also consider withdrawal penalties, required distributions, and the tax effects of moving company stock to an IRA. There are other factors too. Weigh the pros and cons before you make your decision.
• Take your savings in cash as a lump sum. This choice has significant tax implications. Distributions from pre-tax and any earnings on traditional after-tax accounts are generally subject to ordinary income taxes. The IRS requires that 20% of your distribution be withheld for taxes, though your actual tax liability on the distribution may be more or less than 20%. You may choose to take a portion of your plan money in cash and choose another option for the remaining balance.
• Take your savings in cash in regular installment payments. You can receive your savings in monthly, semiannual, or annual installments based on your life expectancy.

 

Taxes: The money you take from your retirement account will be taxed as income. You may also need to pay a 10% federal penalty tax if you're under age 59½. If required by law, Vanguard will withhold some taxes for you.