You may have three options depending on your 401k administrator's policy: 1)Take the stock as an "in kind" distribution which means you have the stock issued directly to you or to your brokerage account; 2)Rollover the stock into a self-directed IRA where the stock is retained in an IRA account; or 3) convert the stock to cash within the 401k and rollover the cash into an IRA. If your cost basis is low, no. 1 may be the best option if you feel the stock will continue to do well since you will be taxed at the long term capital gain rate when & if you need to sell some. In an IRA, all withdrawls are taxed as ordinary income, cash or stock. Your 401k plan administrator should be able to provide you with the taxable amount of the distribution as a "what if". If you also have cash or other investments in the 401k in addition to the stock, you can roll that over separately in most plans. There are some other considerations that should not be overlooked, eg; state personal property taxes, estate taxes.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra