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Due to a recent "workforce imbalance correction", my wife is unemployed. Her former employer sponsored a 401k through Prudential. Subsequent to her layoff, this 401k was transferred to Fidelity. I am wondering how to disengage from this 401k without facing tax liabilities. As a new visitor to Fool-land, I would like to begin controling the future direction of our investments. Is it possible to transfer the 401k to some sort of tax-exempt brokerage account? Is there an accepted vehicle for this concept? Is there another message board or source for this sort of information? Thanks to all for any help.
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Sorry to hear about your wife's 'imbalance'. I'm sure she will land on her feet.
You will need to pick a discount broker that allows 'IRA Rollover Brokerage' accounts. Fill out their forms and they should do the rest. You will then be in control of your IRA future.
Try the DISCOUNT BROKERS board for discussion on good brokers.

Phil
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Greetings, Pdawk, and welcome.

Due to a recent "workforce imbalance correction", my wife is unemployed. Her former employer sponsored a 401k through Prudential. Subsequent to her layoff, this 401k was transferred to Fidelity. I am wondering how to disengage from this 401k without facing tax liabilities. As a new visitor to Fool-land, I would like to begin controling the future direction of our investments. Is it possible to transfer the 401k to some sort of tax-exempt brokerage account? Is there an accepted vehicle for this concept?

As an ex-employee, she is eligible to roll her old 401k money to a self-directed IRA at the broker of her choice without having to worry about any tax impact. The self-directed IRA gives her total control over the way the account is invested and will allow her to trade individual securities or funds as she desires. Both her old plan administrator and the broker you select can tell her how to establish this IRA. To avoid any and all tax hassles, she should specify she wants to arrange for a direct transfer of the money from the 401k custodian to the IRA custodian. Don't worry - They both know how to do this, and all that's required is for her to complete the necessary forms they supply to complete the action.

Regards….Pixy
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Due to a recent "workforce imbalance correction", my wife is unemployed. Her former employer
sponsored a 401k through Prudential. Subsequent to her layoff, this 401k was transferred to
Fidelity. I am wondering how to disengage from this 401k without facing tax liabilities. As a new
visitor to Fool-land, I would like to begin controling the future direction of our investments. Is it
possible to transfer the 401k to some sort of tax-exempt brokerage account? Is there an accepted
vehicle for this concept? Is there another message board or source for this sort of information?


My previous employer had my 401 managed by Fidelity, when I left I just rolled it over to a Fidelity IRA acct. It was easy and painless.
Stayed with Fidelity because I thought since they already managed my account there would be less chance of a problem.
Call them and tell them what you want to do and have them get the forms in mail even if you don't use them. You can make online trades with them for $19.95, may be even less.
Make sure you tell them you don't want any tax penalties. (See Pixies message) They'll know what to do they do it all the time.
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Thanks, will look into
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Thanks for your clear advice. Will start looking for an appropriate broker. You sound well-versed in this area. Is a discount on-line broker a good bet? Any recommendations?
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Thanks gilvid for your reply about rolling 401k to an IRA.
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Pdawk,

Thanks for your clear advice. Will start looking for an appropriate broker. You sound well-versed in this area. Is a discount on-line broker a good bet? Any recommendations?

No recommendations, but there's nothing wrong with using a discounter for your purposes. That's particularly true if you plan on doing all of your own research and selections. Click on the link below, and you'll get some good info on seeking a broker to meet your needs:

http://www.fool.com/media/DiscountBrokerageCenter/DiscountBrokerageCenter.htm

Regards.....Pixy
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