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Author: nukejohn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121181  
Subject: New Tax Law - Can 401K be rolled into an IRA?? Date: 8/12/2001 12:37 AM
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I just read an article in Money Magazine that inferred that in 2002 the new tax law allows a 401(k) to be rolled into an IRA (even if you don't leave the company's employment) as long as the company will allow you to do so.

Due to the limited mutual fund and money market options available from my 401 (k) (and their poor returns), I'd much rather roll my 401(k) into a self directed IRA and control the $$ myself.

Does anyone know anything about this?

NukeJohn
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Author: asmolik Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53253 of 121181
Subject: Re: New Tax Law - Can 401K be rolled into an IRA Date: 8/12/2001 5:14 AM
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Another possible big advantage of being able to roll 401(k) money into an IRA regularly (at least once any 401(k) company-matching contributions for a year are made) would be the opportunity to convert the Rollover IRA immediately to a Roth IRA. Of course, once Roth 401(k)'s are supposed to be available in 2006, then this advantage of rolling over to an IRA would become a non-issue (besides for company-matching contributions which I believe must still always be on a pre-tax basis).

I know that at least some (or all?) companies suspend paycheck-deduction contributions to the 401(k) for a period of time if a distribution / withdrawal is made from the account. Is such a policy some IRS rule for 401(k)'s in general (e.g., which would be the rule claimed to go away in 2002), or would it be some rule than a company or its 401(k) administrator chooses at its own discretion?
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I just read an article in Money Magazine that inferred that in 2002 the new tax law allows a 401(k) to be rolled into an IRA (even if you don't leave the company's employment) as long as the company will allow you to do so.

Due to the limited mutual fund and money market options available from my 401 (k) (and their poor returns), I'd much rather roll my 401(k) into a self directed IRA and control the $$ myself.

Does anyone know anything about this?

NukeJohn


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Author: ibforms One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53254 of 121181
Subject: Re: New Tax Law - Can 401K be rolled into an IRA Date: 8/12/2001 5:33 AM
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>..article in Money Magazine that inferred that in 2002 the new tax law allows a 401(k) to be rolled into an IRA (even if you don't leave the company's employment)

That's not what I gathered from reading the article at
http://401k.mpower.com/commentary/feature/feature_060501.xsp


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Author: acm4tax Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53256 of 121181
Subject: Re: New Tax Law - Can 401K be rolled into an IRA Date: 8/12/2001 5:42 AM
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I just read an article in Money Magazine that inferred that in 2002 the new tax law allows a 401(k) to be rolled into an IRA (even if you don't leave the company's employment) as long as the company will allow you to do so.

I think you misinterpreted the new law. There is going to be a new ROTH 401K plan that you might contribute to if your company offers such a plan. Could this be what you read? But I believe it will still be administered by a trustee and not self directed as you had hoped.


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Author: nukejohn Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53268 of 121181
Subject: Re: New Tax Law - Can 401K be rolled into an IRA Date: 8/12/2001 1:24 PM
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Okay, Here's what I read.

The August 2001 issue of Money Magazine Page 92 (bottom of page). It states " Other provisions of the new law will give workers greater control over their money. From 2002 on you'll be able to roll most types of employer-sponsored plans into another plan or an IRA and to roll an IRA into a new plan - if your employer permits such moves"

It didn't say anything about when you change jobs. I thought you were always able to switch it to a rollover IRA when you changed jobs, so that wouldn't be a new feature.

So, any more comments or any more information would be appreciated.

NukeJohn


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Author: acm4tax Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53291 of 121181
Subject: Re: New Tax Law - Can 401K be rolled into an IRA Date: 8/13/2001 2:22 AM
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From 2002 on you'll be able to roll most types of employer-sponsored plans into another plan or an IRA and to roll an IRA into a new plan - if your employer permits such moves"

It still sounds like the employer has control to me.

I believe it means, your employer could offer you an option on the type of plan you can contribute into. But even if it's an IRA type, the employer still has the option of choosing which group of funds you can make your selections from. For example, Fidelity Funds.



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