There seem to tax benefits in 2010 for putting money into a traditional IRA that I can later roll into a roth IRA. So, can I take the 401K that I have with a former employer and roll it into both a 401K with my new employer, and deduct 4,000 of that to put into a traditional IRA? Thanks so much for your help!!
2006-12-07 03:04:33 · 5 answers · asked by grlpwr777 2 in Business & Finance ➔ Taxes ➔ United States
Sorry, to clarify....can I roll over into both of them? Like most of the money into a 401K and some of the money into the traditional IRA?
2006-12-07 03:24:24 · update #1
As long as your new employer allows roll-overs into their 401k it should be OK. I would recommend rolling the whole thing into a traditional IRA though. It gives you much more control over how to invest it.
2006-12-07 03:09:10 · answer #1 · answered by J 4 · 2⤊ 0⤋
If you take the money out of a 401k before you are 59 1/2 there is a 10% penalty unless rolled over into an IRA. There is no reason for not rolling it over into an IRA. Be sure you do a rollover. If you handle the cash there may be a penalty. Leaving it in may be a good idea if the investment is good and you don't want to figure out what to invest it in with an IRA. See what the 401k fees are and what you are earning and compare it to the cost of an IRA and its return. Many companies don't charge a fee as long as there is a minimum balance.
2016-05-23 03:37:22 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You can roll over into your new employer's plan if the plan has provision to accept rollovers. If it doesn't the plan would have to be amended.
You can always roll over to an IRA.
If your new employer's plan allows rollovers you could split the rollover between the new employer's plan and an IRA.
I would recommend that you do direct rollovers into the IRA or the new employer's plan. If you don't do a direct rollover the old employer will have to withhold 20% for federal taxes. If that is done you will need to come with other dollars to put the full amount in the old employer's plan into the new plan or an IRA in order to avoid taxes and penalty on the 20% withholding.
2006-12-07 04:38:08 · answer #3 · answered by waggy_33 6 · 1⤊ 0⤋
Yes, with my new employer I got the old 401k rolled over with some paperwork. It was all taken care of.
2006-12-07 03:09:41 · answer #4 · answered by Sara H 1 · 0⤊ 0⤋
yes u can roll over to either. just talk to ur HR rep and ur 401K rep and they can tell u how and give u paperwork
2006-12-07 03:06:24 · answer #5 · answered by jenivive 6 · 1⤊ 0⤋