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Quick Facts About IRA Plans
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Do you have multiple 401k plans from a few employers? We
can help you roll them together.
get more info...
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Getting a new job? We can easily help you transfer your
401k to IRA with your new employer.
get more info... |
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IRA Rollover :: Basic rules and
limits of 401k to IRA Rollovers
A way to reinvest the lump sum you’ve saved for
retirement. This can be a traditional IRA Rollover, a
Roth IRA Rollover, A 401k Rollover to IRA, and any other
situation involving your IRA
(including Roth IRA). Here are some IRA
Rollover Rules and basics to get you started.
As retirement approaches … money decisions become
increasingly major. One big decision concerns what to do
with the money in your company retirement plan.
… Consider a direct IRA rollover. For most people, the most
attractive option is an IRA rollover. In other words,
you transfer the money from your 401k, 403(b) or 457
plan into an IRA. It is not hard to accomplish, provided
you have the guidance of a qualified financial
consultant. (Restrictions, limitations and fees may
apply)
Basic steps. When you leave a company, you usually have
three options with your retirement plan: you can leave
the money in the plan, roll it over into a new plan (if
you elect to keep working for a new employer), or do a
direct rollover into an IRA.
A direct rollover is not the same thing as a direct
payment to you. Yes, your employer can actually write
you a check for the full amount of your 401(k) account,
but 20% of that money will be withheld for taxes.
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Retirement Planning Tips:
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Do you want to avoid that 20% withholding? A direct
rollover is the solution. It is a “trustee to trustee”
rollover, which works like this: your employer writes a
lump sum check not to you, but in the name of the
trustee or custodian of the IRA that you are creating to
hold the funds. You then let your company’s retirement
plan administrator know that you’ll be doing a direct
rollover. (There is almost always a form to be filled
out, on which you can state the specific instructions
for the distribution check.)
Your company sends you the check payable to the IRA
trustee, with no withholding, and you have 60 days to
deposit it in the IRA; day 1 is the day after you get
the check. (Sometimes a wire transfer of assets occurs
instead, between one investment custodian and another.)
If you don’t complete the direct rollover in 60 days,
you will pay tax on the entire amount. (There’s no grace
period for weekends or holidays.)
If you want to leave work before age 59½ or you own
shares of company stock, you should consider the tax
implications created by those circumstances before
attempting any kind of rollover.
What you can and can’t do. You can make unlimited direct
rollovers of your retirement account assets, and you can
add the money in your retirement plan to an IRA you
already have, if you don’t intend to go back to work and
put those assets into a new employer plan. Once your
retirement plan assets are in an IRA, you can invest
them in practically any way you choose. You can also set
up your IRA to make systematic payments to you.
You can’t roll over the assets from your retirement plan
directly into a Roth IRA. You have to put them in a
Traditional IRA first, and then convert to a Roth IRA by
paying tax on the assets you want to convert before you
can realize that tax-free growth.
Is it time to roll over your retirement money? If that
time is here or getting closer, you need to be very
careful with what could possibly be the largest lump sum
you ever receive. Be sure to ask a qualified financial
consultant about your IRA rollover options today.
For more information on how we can best assist your
401k rollover and IRA rollover needs, please fill out
the short contact form above or call us at
1-888-333-4641.
* The information on this
page is for informational purposes only and does not
constitute, and should not be construed as,
professional, legal or tax advice. To determine your
individual tax situation and specific needs, please
consult a professional tax advisor.
* Information contained in these sections merely
highlight some benefits. There are risks involved with
all investments that could include tax penalties and
risk/loss of principal.
State Disclosure - The LPL Financial representative
associated with this website may discuss and/or transact
securities business only with residents of the following
states: AK, AR, AZ, CA, CT, FL, HI, ID, IN, MN, MT, NC,
NH, NJ, OH, OR, TX, VA, WA
Advisors will become registered in the respective state,
prior to any direct communication with perspective
customers, who are located in states in which the
advisor is not registered.
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A rollover to IRA occurs when you retire or change
employers and then choose to move or "rollover" your 401k into a
new IRA. This process of relocating a 401k at your previous job
into an IRA is referred to as a 401k Rollover. We are experts
with all of the IRA rollover rules. Give us a call to get
started today.
