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Author: MJStone Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25223  
Subject: Re: One Shot or ???? Date: 1/28/1999 5:07 PM
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< This is over my head. If I move my money from a 401K ( I have 60 days) will I pay taxes if I put it in an index fund? Also, will I have to get a financial manager to do this for me or can I do it myself over the internet or by writing the company? >

You will not have to pay taxes if you roll it to a qualified IRA, but you will want one that is self-directed.

However, the IRA has to be set up first and the money has to go directly to it. A discount broker should be able to help, but if not you might have to go to a larger brokerage house. If the check is cut to you and not the financial institution the taxes and 10% penalty will be withheld, and in order for you to not pay taxes on the "income", you will have to come up with the difference and add that to the IRA. (It's really ugly if you don't just move it directly to the new account.) You will then get the withholding back next year in your income tax refund (sort of.)
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