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Hi BarkingPumpkin,

I want to add to Pension7Ed's comment of...

"You will have maximum control if you use an IRA. Remember to not comingle regular IRA's with Rollover IRA's, if you want to retain the rihgt to later roll-over this money into another qualified plan like a 401(k). (Your rollover IRA will then be considered a 'conduit' IRA.)"

If you do not need the other benefits of your old 401k, you can roll it into an IRA. It is important that you do not roll the 401K into an IRA you already have nor that you ever contribute to the IRA(s), you roll the 401k into, nor convert the IRA to a Roth IRA, because if you do then you can no longer roll out of the IRA into another firm's 401K.

The reason for me to eventually roll into my firm's (or another firm's) 401K is if I want to retire between the age of 55 and 59 1/2. If I terminate service in the year (or years after) I turn 55, I can take distribution from my 401K with out 10% penalty.

If you are under 55 when you terminate, you can not touch the 401K until you turn 59 1/2. BUT you can roll to an IRA when you are nearer to 55, you can roll into the firm's 401K and then leave employment in the year (or years after) you turn 55 and take 'qualified' distribution - meaning no 10% penalty.

Hope this helps.


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