If you have money in a former employer’s 401k plan, you are probably eligible to take your money out, but don’t be too hasty.
The retirement plan rules are designed to help you keep growing your tax-deferred savings until you retire if you keep your savings in a tax-qualified plan. However, keeping your 401k assets in your old plan is not your only option. You can also choose to roll your savings over to other savings vehicles.
Done correctly, a rollover from one employer’s plan to another employer’s plan or an IRA will not trigger any tax consequences and will enable you to continue building your retirement savings until you retire and beyond. Here are some things to consider as you think about your options.
Stay on former employer’s plan
Roll over to new employer’s plan
Roll over to an IRA
The best choice for you will depend on your financial needs and savings objectives. You will want to compare the investment options, fees, and services in a new employer’s plan or an IRA with your old employer’s plan. It is often a good idea to seek the assistance of a financial or tax professional.
Although each plan administrator will have its specific rollover documentation and procedures, here are the general steps involved in a 401k rollover.Need help? Contact us today
Even if you are eligible to withdraw your money from your 401k plan, there are some types of distributions that cannot be rolled over to another plan or IRA. You must take these kinds of withdrawals in cash.
You may roll over pre-tax or tax-deductible retirement savings between the following types of savings vehicles:
If you made Roth contributions to your former employer’s plan, you might only roll over the Roth 401k assets to a Roth account in your new employer’s plan or to a Roth IRA.
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