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Author: mattpam Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121261  
Subject: Re: 401k vs roth Date: 1/1/2000 12:19 PM
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You can't roll/over a 401K directly into a Roth IRA.
The procedure is very rigid. You must first setup a
a roll/over IRA with a brokerage house. Second, you instruct the 402K administrator that you want your assets transferred to the brokerage R/O IRA account. Once it is in the IRA, get a form from the broker to set up a Roth IRA. Then request they send you the standard form, that authorises them to to transfer some or all of the IRA to the Roth account. You will also have to fill in a beneficiary form. Sounds complicated but it really is'nt; don't be suprised if it takes a fews weeks to execute.
The transfer from 401K to R/O IRA is tax free; however,
the transfer from IRA to the Roth IRA is fully taxable
in the tax year it occurs! Hence you may wish to spread
this action over several years to spread the tax burden
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