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401(k) Rollover

What is a 401(k) rollover? During a 401(k) rollover you move funds from a 401(k) to another qualified retirement account. In many cases it makes sense to transfer your money into an IRA. However, it's also important to understand the rules that apply to this transaction. Speaking with a financial advisor regarding any financial decisions you make can give you peace of mind and helps you make the best decisions.

What Is a 401k Rollover to IRA?

You can move your 401K funds into an individual retirement account. To do so, you will need to work with the financial institution that provides this service. With an IRA, you can save money for retirement, and it will grow tax-free or, you can set it up as a tax-deferred account.

There are two main types of IRAs. In a Traditional IRA, you will make contributions that you can deduct on your tax return. Any money that you earn will grow tax-deferred until you make a withdrawal once you retire. Retirees often have lower tax brackets, so it makes sense to go this route. In a Roth IRA, you make contributions with after-tax funds. That means that you've already paid taxes on the money and once you withdraw it you could do so tax-free.

Your 401(k) has more limitations in terms of investment opportunities than an IRA account. Therefore, if you wish to have greater control over your investments, you might choose an IRA account. Some of the different types of investments to choose from include bonds, stocks, EFT's and other assets.

401k to IRA Rules

It's important to know the rules when you transfer a 401k to an IRA. Your financial advisor can tell you more about the details of your particular transaction. Generally, it's important to know that you have to make the rollover within 60 days of withdrawing your money from your 401K. Additionally, you can make direct transfers that make the transaction simpler to help you avoid breaking the rules.

As you can imagine there are a lot of rules and other considerations when rolling over your 401(k) to an IRA. Therefore, it's a good idea to consult with your financial advisor about the best decisions for your goals.


  • What is a 401(k) rollover?
    A 401(k) rollover involves moving funds from your employer's 401K into another retirement account such as an IRA or another 401K.

  • How can I rollover my 401(k) without penalty?
    Speak with your financial advisor to make sure that you're following all the rules to avoid a penalty. Fr one thing, you have to deposit the money that you withdraw from your 401K into an eligible account within 60 days. Your other options include leaving it invested, rolling it over to another 401K or making other decisions that make sense for your situation. You may have more 401(k) options than you think!

  • How long do I have to rollover my 401(k) from a previous employer?
    As mentioned, you have 60 days to roll over your 401K from our previous employer to your new employer or an IRA. It's important to meet this deadline to avoid negative tax consequences.

Meeting with a financial advisor regarding your financial future is always a good idea. That is particularly true when dealing with your retirement funding. That's why we recommend making an appointment today to talk about any questions you may have about your 401(k) to IRA rollover. Contact our team today to set up an appointment regarding your 401(k) options.

Work With a Financial Advisor on Your 401(k) Rollover

When you work with an experienced financial advisor, they can help you make life decisions about your finances. That's particularly important when making plans for your retirement. There are financial advisors that specialize in 401(k) rollover to IRA rules. These professionals can also help you with other financial decisions such as funding education for your children, purchasing a home and creating a cohesive financial plan for your family's future.

So, when you meet with your financial advisor, bring a list of all the questions that you may have regarding your 401K rollover options and other financial decisions.

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