How to rollover 401k?

28th Oct 2009 by Joseph Pousada

You have two options to rollover your 401k plan; you can rollover to a new 401k or an IRA Rollover account. In both cases, your first step would be to contact the plan administrator for the plan you are taking your assets out of, as they may require you complete their forms to process and will give you cut off times for the paperwork. If you are going from your old 401k to your new 401k plan you will want to take note how the funds will be sent from your old 401k to your new one. Some plans will only send a check, some will give you options such as a fed wire. Contact your new 401k plan administrator to obtain the correct delivery information (address, wire instructions etc…) You would follow the same procedure for rolling over assets into a IRA rollover account. The key here is whether you anticipate ever doing a rollover back into another 401k plan. Technically it does not matter if you rollover your assets to your IRA account or a new account set up as an IRA Rollover account but, you would be keeping the assets from the 401k separate from the IRA personal contributions. You would want to keep them separate to simplify matters when trying to determine which amount you can rollover back into a new 401k from your previous 401k.

This answer is the subjective opinion of the writer and not of FinancialAdvisory.com