No. of Recommendations: 0
I found the following from another newsgroup. Guess a Rollover IRA is an option for me and will allow me to transfer to 401K in the future.

The issue is usually that if the 401K is distributed directly to you,
then taxes
are withheld from the disbursement and there is usually no way to get
that back until you file your taxes for the year. You can still set up
rollover IRA, but to fully roll over the full amount, you have to come
with the amount that was withheld (but you'll get it back with your tax
refund next year). If you just rollover the amount that was distributed
you, the amount withheld and sent to the IRS by your previous employer
is considered a disbursement to you and you will owe taxes and penalty
at least that much (unfair as it may seem).

It is thus usually better to arrange that the 401k distribution be sent
to an IRA custodian, in which case no withholding takes place. But it
indeed, probably too late for that now.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.