One of your most flexible 401k rollover options is moving your full account value into a rollover IRA. An IRA gives you greater freedom in choosing investments than a 401k rollover option. Continue reading
The best way to avoid tax penalties with different 401k rollover options is to understand how these different rollover options work and which one is most likely to create a tax burden for you. It’s also important to understand what these options are called and to ask for what you want by name when you request a rollover plan. As always, any 401k taxes or penalties on your money are your responsibility.
Two Types of 401k Rollover Options
The two main types of 401k rollover options are direct and indirect. In an indirect rollover, you request the money from your old 401k plan, receive a check from your former account provider and invest it yourself in another retirement account, such as an IRA. Continue reading
When you initiate a 401k rollover, be aware that there are two different rollover options for you to choose from – direct or indirect rollover. The former offers greater protection for your retirement savings, while the latter may expose you to a potential tax burden. This isn’t to say that indirect rollover options are always a bad choice – just which the circumstances under which they’re the best choice are few and far between. Continue reading
Planning for your retirement is crucial. Most Americans will not be able to rely on Social Security income alone to provide for all of their expenses or to allow them to continue to enjoy the standard of living they had before retirement. Compounding this situation, many Americans have increased medical expenses as they age. In addition, many Americans are living longer than their predecessors, making it easier for you to outlive your money if you haven’t planned well. You deserve to enjoy your retirement years, and that means planning your investments carefully.
As you may already be aware, there are a number of different types of retirement investment accounts, one of which is the 401k. If you have a 401k plan, you probably began participating in the program through an employer. If you’re considering a rollover, it’s likely that you’ve changed jobs and are wondering if your employer 401k needs to move on to a new “environment” as you have. Other reasons to consider a rollover include having a 401k account that you believe isn’t performing to its full potential, or if you have multiple 401ks or retirement investment accounts and would like to consolidate those accounts to simplify management. Continue reading
Maybe you’ve changed jobs. Maybe you’ve found that your old employer 401k isn’t performing as well as it could be. Or maybe you have multiple options to rollover 401k accounts from previous employers and you’ve decided that it’s time to get your nest eggs into fewer baskets. For whatever reason, you’ve determined that it’s time to rollover your 401k plan. Now, the challenge becomes how to accomplish that while avoiding tax penalties in your 401k rollover options. Continue reading