401k rollover?

Question

I've got some funds (401k) in a company that I no longer work for. I was wondering if I can roll these funds into another 401k plan with my current employer without any penalties or taxes having to be paid. I know I can only contribute $15,500 a year to my current plan and that's why I was wondering if the IRS considers a "rollover" a "contribution" to a plan.

Thanks

Answer 1

Yes, you can roll them over into another retirement vehicle like your employer's 401k or an IRA without penalty. You have to pay a penalty on the funds you withdraw, not a rollover. However, you have a limited amount of time to do it. I'm not sure but I think it's 60 days. Your old 401k provider will send you a check for the balance. As long as you deposit the money into another qualified account within the time period, there is no penalty. Whether or not you can roll it into your current 401k plan depends on the provider. Check your plan details, but the answer is probably yes.

The $15,500 limit is for 2007. If your total contributions to 401k plans this year is more than $15,500 then you will incur a tax penalty. Rollovers from previous years are not counted as contributions towards the $15,500 for this year.

Good luck!

Answer 2

Boy there is a lot of misconceptions out there...

You can roll it into your new 401k and there will be no taxes and penalties if it's a direct rollover. A direct rollover is when the distribution check is made out to the new plan rather than to you. When you fill out the paperwork for your old company make sure you elect the direct rollover option and provide your new company's name. The check will be made out like this "New Company 401(k) Profit Sharing Plan FBO John Doe" If done this way then you can't cash the check.

You only have 60 days to complete the rollover process once the check is cut...not 60 days from the time you leave the company so there is no rush.

The rollover amount is not considered a 402(g) contribution which is limited to that $15,500.00. So you can roll it in and contribute up to that amount completely outside of the rollover amount. One thing to consider though is that the 402(g) limit is a personal one so if you've already contributed $8,000 to your old company then you'll be limited to $7,500 in your new company's plan. they won't know how much you've put in for the year so you are expected to monitor this.

Answer 3

I think a better option might be an IRA rollover. You can roll the money over into any IRA that you choose. Your choices would otherwise be limited by the current employer's program.

I did an IRA rollover to T Rowe Price funds. They took care of everything. It did not cost me anything. It worked out well for me.

Answer 4

The previous poster is correct - you can roll it into the new plan IF the new plan permits it. Otherwise, establish a rollover IRA. Make sure you do a trustee-to-trustee transfer and do not withdraw the funds directly. A rollover does NOT count as a yearly contribution.

Answer 5

shifting a 401K to an IRA is advantageous. in case you probably did a trustee to trustee circulate, there is not any effect by utilising putting the 401K rollover onto your return. in case you took a examine from the 401K and walked it over to the IRA persons, you mandatory to be careful via fact the examine generally has 20% withheld for taxes. to sidestep having any of the money be taxable, you will could desire to arise with the different 20% to put in and then get the 20% returned at tax time. (in case you in common terms moved 80%, you will possibly see an effect on your return.)

Answer 6

The other answer is wrong. You cannot roll it into your new 401k. You can roll it into an IRA. There are no penalties or taxes for that.

Answer 7

You should roll that over to an annuity. If you live in Illinois, I can help you wtih that. email me at [e-mail]