Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Next Thread
Author: CherryNel Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25318  
Subject: Rolling Over 401K Date: 1/22/2002 8:16 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Who do I talk to about rolling over our 401K when my husband leaves his employment? Any suggestions about what the best steps are? Thanks so much. CherryNel
Print the post Back To Top
Author: nmangohig Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14411 of 25318
Subject: Re: Rolling Over 401K Date: 1/22/2002 8:20 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
You'll need to get in contact with the current account holder. You'll need to fill out rollover paperwork indicating where your funds will be going, or whether funds will be issued to you by check.

You will also need to contact whatever brokerage you want to roll your money into. You can establish a rollover account before you actually cash out of the old brokerage.

We did this process when my wife was laid off last year. We rolled over funds from Citigroup to Vanguard. It was much easier than I thought it would be.

NEM

Print the post Back To Top
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14412 of 25318
Subject: Re: Rolling Over 401K Date: 1/22/2002 8:38 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
CherryNel,

You wrote, Who do I talk to about rolling over our 401K when my husband leaves his employment? Any suggestions about what the best steps are?

Check out the Fool's resources on the subject at: http://www.fool.com/taxes/2000/taxes001027.htm and http://www.fool.com/retirement/manageretirement/manageretirement5.htm.

Another excellent resource is Quicken.com. This link explains all your husband's options: http://www.quicken.com/retirement/401k/topic/?top=changeJob.

In my opinion, the best choice is to roll the 401(k) account into a Rollover IRA. To summarize:

1. Find and open an IRA at a brokerage, bank or mutual fund company;
2. Arrange with your former employer's plan administrator to transfer the funds to your new IRA account or get the check made out to the trustee.

- Joel

Print the post Back To Top
Author: AsenathWaite Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14421 of 25318
Subject: Re: Rolling Over 401K Date: 1/23/2002 3:16 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Hey Cherry,

the only thing I would add, is that if you roll the funds into a ROTH IRA, you will have to pay some taxes -because that grows tax-free.

Also remember to include a copy of your last statement in your application to the new firm. They will needs this.

I recently rolled mine over to Fidelity -they were very easy to wrok with -it was simple.

Veronique

Print the post Back To Top
Author: ClancyFan Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14422 of 25318
Subject: Re: Rolling Over 401K Date: 1/23/2002 3:27 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I recently rolled mine over to Fidelity -they were very easy to wrok with -it was simple.

I did a split rolling some to Legg Mason, some to Meridian, and some to E*Trade and didn't have a problem with that (I did have problem a problem with the timing... I mailed my form on Sept 7th and it was withdrawn on the day the market hit bottom.)


Print the post Back To Top
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14424 of 25318
Subject: Re: Rolling Over 401K Date: 1/23/2002 4:55 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
AsenathWaite,

You wrote,

the only thing I would add, is that if you roll the funds into a ROTH IRA, you will have to pay some taxes -because that grows tax-free.

You can't roll directly into a Roth IRA. You must first set up a Rollover IRA, do the transfer, then do a Roth conversion/reclassification. Doing the reclassification requires you to recognize the IRA assets as income.

Fortunately, the Roth conversion is exempt from the 10% tax penalty for early withdrawal; but I believe you have to recognize the income in the current year. When Roth IRAs first became available, there were a few years given where Roth conversions could be made and the income could be recognized over something like 3-5 years. I'm not sure that you can still spread that income out, so converting a large IRA might be a problem.

If you still want to have a Roth instead of a conventional, you can spread out the conversion manually by transferring the funds from the rollover to a conventional IRA a little each year. Once in the second IRA, you can covert it to a Roth. In subsequent years, you can combine the resulting Roth IRAs if you like.

Before doing the Roth conversion, make sure you want to pay the taxes on it now. And don't do a conversion that's so large you increase your marginal tax bracket. Remember: Once you convert to a Roth, you can't move the money back to a tax-deferred account.

BTW: If I'm not mistaken, one of the biggest advantages of doing the Roth conversion is that you can effectively make a larger-than-normal IRA contribution. How? The whole, untaxed amount of the conventional IRA gets converted to the Roth IRA and you get to pay the taxes out of your current income. So you can effectively view the increase in your income tax bill as an additional IRA contribution that got in through a loophole in the tax law.

Also remember to include a copy of your last statement in your application to the new firm. They will needs this.

No, I don't think they do. I've only done two rollovers myself; but they've never asked me for this. It might be a good idea if you're transfering one IRA account to another; but a 401(k) account must be liquidated, so the fudicuary will be writing a check to the new institution. Your last account statement has little bearing since the valuation could have increased or decreased substantially in the interim; and since there's no securities being transfered, they cannot use in any way I can think of to verify the transfer.

- Joel

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: TheBreeze Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14453 of 25318
Subject: Re: Rolling Over 401K Date: 1/26/2002 8:04 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
Fortunately, the Roth conversion is exempt from the 10% tax penalty for early withdrawal; but I believe you have to recognize the income in the current year. When Roth IRAs first became available, there were a few years given where Roth conversions could be made and the income could be recognized over something like 3-5 years.

A conversion done in '98 could be spread across '98 to '01. That special thing is gone. However, you can still roll the 401k into a regular IRA, and I'm pretty sure that you can convert only part of it each year. Ask the trustee (place where you send the rollover to) how to do it.

Print the post Back To Top
Author: AJuniorS Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14457 of 25318
Subject: Re: Rolling Over 401K Date: 1/27/2002 2:17 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
I agree with NEM's instructions. Vanguard is an Excellent company, I have done several rollovers with them and I have never had a problem.

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Next Thread
Advertisement