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
While there are many 401k rollover options for you to choose from, there’s one thing you’ll want to keep in mind before performing any of the viable options mentioned here below – how old are you? As you might expect, your 401k rollover options are very different if you’re under the minimum retirement age of 59 ½ years old, as you may be subject to additional taxes and penalties if you perform certain types of rollovers at this age. Other rollover options can and will apply if you’re between the ages of 59 ½ and 70. Continue reading