How do I put my 401k plan (from a previous employer) into an IRA?

Question

I heard that this would be a good idea. Is this true or not? What are the pros and cons?

Answer 1

open an IRA, then call the 401K plan. They will have forms for you to file. Make sure you tell them it is for roll over and not for distrubution. They will cut a check or you can ask for wire transfer. The check should specify it is for roll over and not cashable. As a rule of thumb 1) never cash out your 401K when you leave the job as you will pay penalty tax 2) roll over the 401K into your own IRA. What happen most of the time whe peopel leave a company but leave their 401K there they either forget about it, something can happen to the company and they loose the plan (although the money is yours I would not take the risk), they change plan, or do not offer the choice of funds...etc

Answer 2

Yes it is a good idea. There really are not any cons to doing this beacuse it works pretty much the same as the 401k except you can have more control over what securities you buy with the money.

Answer 3

Shop the banks for the best rates. They will have the paperwork for you to fill out. You will have to roll your 401k into a qualified IRA or you will end up paying early distributions fees and taxes on it.

Answer 4

You can do it very easily at T. Rowe Price, Vanguard and other mutual funds houses. They even have all the forms available online and will do the direct transfer for you.
It is preferable to leaving in the old plan as you can invest the IRA in a wide variety of funds.

Answer 5

I moved mine only because they wouldn't let me change my mailing address without contacting my previous employers benefits department. I haven't worked for them for 8 years.

Anyway I opened an unfunded (no money deposited yet) IRA account at the institution of my choice. Then once I had an account number I contacted my 401K plan institution and told them to close my account and mail the proceeds to the new institutions mailing address (make sure you check with the new institution for the EXACT mailing address). I told them to mail the check and make it payable to the new institution and include the phrase "for the benefit of (name on new account)"

Now I don't have to go through my previous employer just to change my mailing address.

Answer 6

no longer once you do it or have achieved as a trustee to trustee pass from the 401K trustee on on your IRA account holder trustee then you definitely does not touch any of the 138.40-one in any respect and it may then all be on your IRA account at that element on your lifestyles with out having to pay the ten% early withdrawal penalty plus the federal earnings tax at your marginal tax fee once you properly comprehensive your 1040 federal earnings tax return for the tax twelve months which you opt for to try this in. in case you do choose for to get the money in to hands and then do the ROLLOVER in the 60 earnings tax loose rollover era it is available to you for this purpose you are able to might desire to upload the quantity that they are going to withhold returned into the 401K quantity which you acquire via verify to make up the comprehensive 138.40-one for the comprehensive 401K distribution which you be rolling over on your IRA freed from any federal earnings tax and likewise you does not have any quantity of the early withdrawal penalty which you will might desire to pay once you do comprehensive your 1040 earnings tax return in the time of the subsequent twelve months tax submitting season. merely remember that the rollover of the money via you in case you do acquire the quantity has be achieved earlier the top of the 60 day earnings tax loose term ends. desire which you locate the above enclosed suggestion smart. 09/13/2011