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Sorry RB! cannot roll a 401k directly into a Roth. The only way you can R/O into a Roth is from an existing IRA. The procedure is to choose a stockbroker(can be
discount or on-line) And ask him to send the necessary
forms to set up a roll/over IRA. Fill them in and send them back to the broker. Then notify the Custodian of
your 401k that you want him to deposit assets into
the roll/over IRA. This process does not create any tax liability. When you draw funds from the IRA you will have to pay tax at ordinary income rates. If you withdraw before age of 59 1/2 you may be liable for a eary withdrawal penalty. However, once it's in the IRA
you can now create a Roth IRA and roll/over assets to
the Roth - possible over a period of years to minimize
the annual, ordinary income tax impact. Once in the Roth it accumulates taxfree for ever. It is tied up for five years before you can withdraw without penalties. Hope this is help in retirement planning!
- - Matthew
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