I have recently resigned from my job to be at-home full time with my children. I have a 401K with my funds currently invested in a S&P index fund. Is there any reason why I SHOULD NOT roll the money out of the 401K into an IRA? I know I'll have more flexibility for where to invest my funds. I'm mostly interested in any disadvantages related to withdrawing the money from an IRA versus a 401K when I'm 59 1/2. How about for beneficiaries in the event of my death?
for SUSNHNE, whose name looks like "Sunshine" to me,Hello, and welcome aboard.If you roll your 401k over into an IRA that already has other assets in it, then you cannot later roll that IRA into some future employer's 401k. Evidently the funds are regarded as commingled and not separable. This isn't a reason not to roll your 401k over to an IRA. It's only a reason not to roll your 401k over to an existing, non-empty IRA if you think there is any reasonable chance you might like to have another employer later. You might like to preserve that flexibility -- keeping separate IRA's, although I commingled mine and I haven't regretted it. Best regards,Chips, retired for more than six years, and planning never to have another employer
I think you have to pay the 10% penalty for withdrawals (without hardship cases) from an IRA before 59 1/2. However, if you left service from a company and leave the money in their 401 plan you can make withdrawls after 55 without penalty.
SUNSHINE wrote: ...Is there any reason why I SHOULD NOT roll the money out of the 401K into an IRA? ...I'm mostly interested in any disadvantages related to withdrawing the money from an IRA versus a 401K when I'm 59 1/2. ...You have received some excellent advice in prior posts. Several other points you MAY want to consider and/or investigate BEFORE you take any action: 1) Your 401(k) fees may be lower (i. e. they may be partly subsidized be your former employeer) than equivalent IRA investments; 2) Should you ever be in situation where you are sued (pray not) for libility, etc. - it is my understanding that a 401(k) offers you greater protection from loss (attachment) of funds. 3) You may have other benefits from your former (on line daily management, reports, etc) which may cost you $$$ within an IRA. 4) Read the 401(k) document and/or contact your Administrator (former) for ALL the various details/benefits to which you are currently entiled as a former employee. Study, and make your own evaluation. I did and decided to stay with the 401(k). Good luck, Dick
First IRA with Brokerage is much much much better for all your concerns.I can't think of any any any reason not to.401s are the worst investment option avaliable.. Worst Worst Worst.Ok I will be more positive401ks are positively the worst investment option avaliable.
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