What is the best way to rollover untaxed retirement accounts ?

Question

I am nearing retirement and have about 25k in untaxed money in a retirement account through my employer. I am looking for a way to roll it over tax free and still keep investing it safely but have access to it as needed with no withdrawal penalties. Is there a way ??

Answer 1

For maximum flexibility, roll your 401K OUT of the employer's plan and into a ROLLOVER IRA. If you open the new IRA with a major brokerage house, you will have the world of investments available to you, including individual stocks and bonds, mutual funds, etc. You could choose to buy an annuity to guarantee a payout for life, or you could put it in a Rollover IRA with a mutual fund company. Personally, I recommend the brokerage type account for maximum flexibilty. Yo ucan even put your money in a money market account while you make your plan. But get it out of the employer's plan because you have no flexibility there.

You can do a direct rollover AT ANY AGE without penalty or tax effect.

Talk to a financial specialist. Get a plan!

The WealthBuilder

Answer 2

I'd have to know more to give a definite answer to your question.

Get your employer's plan document (ask for it, they have to give it to you). Find out what your rollover options are. If you choose to do a rollover, make sure it is a "trustee to trustee" rollover to avoid possible penalties or withholding. For the transfer to be tax-free you would have to roll it into something other than a Roth IRA. I will assume that it is a traditional IRA.

To access your IRA without penalties you have to satisfy conditions too numerous to list here. The most common way is to be over 59.5. If you are under 59.5 but want penalty-free withdrawals, you can set up a series of substantially equal periodic payments over your lifetime.

You can't take random withdrawals while you are under 59.5 and avoid the penalty unless unusual circumstances apply, such as high unreimbursed medical expenses.

Answer 3

Yes. Banks are set up to do this, and they'll often do it free of charge.

All you really need to do is roll it into an account that has a similar character as the one you have now. (You can't roll a traditional IRA into a Roth, etc.) The bank should cover this with you.

I rolled my government TSP into a traditional IRA because that's really what a TSP is. The TSP folks took an automatic tax penalty before sending me a check, I simply added back the amount they deducted for taxes and claimed it on my return and got it back.

(This is not the way to do it, I just didn't have a choice. If something like this happens, you can get yours back the same way as long as you stay within the withdrawal guidelines. Banks make the whole process easier.)

Answer 4

Put it into a rollover IRA. As long as you're at least 59-1/2, you won't pay penalties to withdraw, will just pay the tax due.

Answer 5

no matter if it really is an instantaneous retirement account to retirement account rollover it doesn't set off any tax; be sure it really is carried out properly because the incorrect examine mark can take an excellent type of work to straighten it out.