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Investing/Strategies / Retirement Investing
|Subject: Re: 401(k) job change||Date: 11/26/1998 11:37 AM|
|Author: TMFPixy||Number: 6787 of 74431|
Greetings, Tom, and welcome. You asked:
<<Our company just recently announced that we were bought out by another company Anyway, we will officially become thier employees as of January 1. This employer does allow us to rollover our 401 into theirs.
My question is this (forgive me, I am new to this):
Will this money be taxed or before the going into this new employers plan? I am not aware of the laws.>>
If you transfer your existing 401k plan balance into your new employer's 401k plan there will be no penalty and no taxes due. Taxation occurs only when you receive a distribution from the plan. The penalty applies only if you receive a distribution when you're younger than age 59 1/2. In this case, you aren't receiving the distribution, the new 401k plan is. Thus, no tax and no penalty applies.
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