What is a good way to roll-over my 401K?

Question

I transferred to a new job for better pay, but this new company doesn't offer a 401k plan. My old company did and I had put some of my money into it. My first question is what financial institution offers the best rates for me to roll over my 401k? My second question would be how do I transfer it from one institution to another?

Answer 1

Any family of mutual funds can handle a roll over for you. I would recommend looking for no load, low-expense index funds. The two largest fund managers of these types of funds are Vanguard and Fidelity.

Both have rollover IRA specialists that can help you with the process. It is relatively painless and the funds go directly to the IRA custodian, so you do not have to worry about deadlines or the 20% penalty tax if you don't roll it over within 60 days.

Check to see if you are eligible to roll over into a Roth IRA, which has more tax advantages than a traditional IRA.

If you put the old 401k funds into a "roll-over IRA", these are all pre-tax contributions and at some future time, you can roll it over into another employer plan (401k). You cannot roll over a co-mingled IRA with pre and post tax dollars into an employer plan, only "rollover" IRAs. If you don't plan on putting it in an employer plan, it can stay permanently in your IRA.

The only downside to rolling over a 401k into an IRA is that if you leave an employer after age 55, early withdrawls from a 401k are not subject to the 10% penalty tax. For an IRA, any withdrawls before age 59 1/2 are subject to the 10% penalty tax.

Answer 2

401ks are only offered by your employer, so you won't be able to get that at a bank or financial institution - however, you can roll your current 401k into an IRA or Roth IRA.

The rates depend on what you invest in, and the bank or financial institution you choose. Think of the IRA like a barn - you can put whatever you want in the barn and the barn will protect it. You can invest in any number of stocks, bonds, mutual funds, etc, within the IRA. What you should invest in depends on your age, years till retirement, and risk tolerance. If you're young and plenty of time before retirement, go for more aggressive stocks or stock mutual funds within a Roth IRA; if you're within ten years of retirement, go for a more conservative bond fund within a regular IRA.

One you decide how and where to invest, the actual transfer is easy - you just request the forms from your new and former invesment companies, fill them out, and forward the check from one to another.

Answer 3

you can go to a bank, or a local financial advisor to find out what needs to be done. More than likely you will end up rolling it into an IRA since your new company doesn't offer a 401K. I worked for a company and had a 401K with them, and rolled the money into my IRA after leaving them. The main thing is though that you want to make sure that you don't get a check payable in your name for rolling the money over. In that case it would be a distribution, and withholding taxes would be taken out that you would have to replace for the rollover to be non-taxable. If you get a check make sure it is payable to the new institution, that way it will be treated as a direct rollover.

Answer 4

Most Mutual fund companies have a roll over kit that lets you have your 401k contributions sent directly to them, you could start a money market account at about 5% interest then decide how you want to allocate the money. Don't pay anybody to do this as there are lots of places that will give you advise just by having a money market account with them and do not have them send it to you, Big penalty for that.

Answer 5

You can "roll over" your 401K to a personal IRA. Depending on your age, I would consider rolling into a Roth IRA! The Roth is a retirement vehicle that will allow you to access your money "Tax Free" when you become eligible for your retirement. The IRS has determined that you can access your retirement account at age 59 1/2 without any withdrawal penalty.

Answer 6

Go to a firm that offers a variety of funds and options and free advice. An Edward Jones office would be my initial suggestion.

They can handle the transfer, it is just a one page form.

Set up your IRA so you can deposit more money into. By all means just because your new employer does not offer a 401 K DO NOT STOP PAYING INTO YOUR RETIREMENT ACCOUNT.

Answer 7

in case you roll your 401K right into a Roth you pays all the taxes up front. you're able to get a common 401K rollover to place your 401K into. Then in case you nonetheless have extra funds to make contributions you may commence a Roth in case you're youthful, or purely upload it to the classic in case you're older.

Answer 8

I like the T Rowe Price family of mutual funds. Most of them are no fee and no load.

Your old employer should have a form that allows you to roll it over without taxes to your new account.

Answer 9

Figure out where you want the money to go. I like Vanguard and Fidelity. If you call them they will do all the paperwork for you, and you will just have to sign.

Answer 10

A spatula!