Option #2: Receive the distribution in a check made payable to you.

If you choose to have your retirement plan benefits paid to you, consider the following:

• Your distribution will be subject to a 20% mandatory withholding tax, which means you will receive only 80% of your retirement savings.
• Your distribution will be subject to federal income tax in the year received unless you roll it over within 60 days of receiving your check.
• You can roll over 100% of the distribution eligible for rollover treatment by replacing the 20% that was withheld with money from your other savings. You will receive credit for the 20% withheld when you file your federal income tax return for that year.
• If you only roll over the 80% of your distribution that you received, the 20% withheld will be considered taxable income and will be subject to current federal income taxes and a possible 10% early withdrawal penalty. Depending on where you live, state and local taxes may apply as well.

How can you avoid paying unnecessary taxes and penalties?

Consider a Northern Funds Rollover IRA or have your money transferred directly to your new employer's qualified plan.

Direct Rollover Advantages

• Your money can continue to grow tax-deferred until withdrawn
• Avoids 20% mandatory withholding tax
• Avoids 10% early withdrawal penalty

Option #1: Request a direct rollover into a Rollover IRA.

IRS CIRCULAR 230 NOTICE: This information is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. For more information about this notice, see northerntrust.com/circular230.