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URL:  http://boards.fool.com/ltltltltlt-ve-got-a-401k-from-my-10850629.aspx

Subject:  Re: 401 K Roll Over Date:  5/10/1999  7:19 PM
Author:  jocave Number:  10458 of 75539

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've got a 401K from my previous employer, that has OK results for the last 4-5 years, since I left that company. I've been primarily in the Stock, or the Equity Fund Options. My full service broker has suggested that I roll this over to my account with him, and he will do more for my money. I have some attraction to moving this money into an IRA that I could have more diversity with, but I'm still considering the angles. I have a fairly good broker, but am in the process of locating and starting a discount brokerage relationship.

Is it feasible/possible or foolish to consider rolling his 401K to a discount brokerage account, or are there some risks with the 401 IRS tax laws, etc...?
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You are free to roll your 401(k) anywhere you'd like-- full-service or discount-- or keep it where it is. Generally, Fools believe they can get better returns than through investing in the limited funds offered in 401(k)'s.

Tax-wise, there's no problem. Assuming you do a trustee-to-trustee transfer (i.e. you never get a check), there's no taxable event when you roll you money over.

There are minor differences in the rules governing IRA's and 401(k)'s, but they don't affect most people. I'm not an expert, so others can correct me, but I believe the main differences are:
- IRA's require you to start distributing money at 70.5, which I don't believe 401(k)'s do.
- You can begin withdrawls from an IRA before 59 if you take "substantially equal periodic payments" calculated based on your expected ife span.
- If you ever need to shield assets from creditors, 401(k)'s are safer than IRA's. Most states protect IRA's just like 401(k)'s, but some may not. Roth IRA's get even trickier.
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