| 401k Rollover Penalty Free |
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Andrew
Admin
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Location: Texas
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| 401k Rollover Penalty Free |
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401k plan participants should be aware of the ability to utilize a 401k rollover to move their retirement monies to their own IRA and avoid unnecessary penalties.
If you're in-between jobs, layed-off or terminated, or moving to a new job with no retirement plan you may want to rollover your existing 401k account funds into a traditional IRA (individual retirement account) to avoid taxes and early withdrawal penalties associated with direct cash disbursements. Avoiding this unnecessary additional income tax and keeping your money invested also allows the maximum tax-deferred growth of your 401k retirement funds.
Although plan participants can usually leave their existing 401k account in place after gaining new employment, selecting your own retirement plan may provide for more options matching your investment strategies and help you reach your retirement goals. Some people choose a rollover account just for the wide range of investment choices offered, and more control over who is managing their retirement money. If you've worked at multiple jobs and have two or more 401k accounts, you can utilize a rollover to combine them all into a convenient single retirement account.
A 401k rollover is tax and penalty free, however you typically must have a 401k from a previous job as only rarely will companies allow rollovers of your retirement funds into an IRA for active employees.
Check the following links for more 401k info including 401k loans, 401k early withdrawal penalties, and 401k contribution limits.
Last edited by Andrew on Sun Sep 19, 2004 12:27 am; edited 2 times in total |
Thu Aug 05, 2004 2:27 pm |
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LuxoDave
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Location: Albuquerque
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You can roll over into a Roth IRA? I thought you could only roll over into a traditional IRA.
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Sat Sep 11, 2004 1:55 am |
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Andrew
Admin
Cash: $ 467.10
Posts: 1717
Joined: 02 Nov 2003
Location: Texas
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LuxoDave,
You are correct. Thanks.
I need to clarify and say that you can't directly rollover into a Roth IRA, however, after rolling over into a traditional IRA, funds may be subsequently rolled into a Roth IRA.
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Sat Sep 11, 2004 2:07 am |
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