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401K v IRA roll over or not?

401K v IRA roll over or not?

Old Mar 17th 2008, 7:06 pm
  #16  
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Default Re: 401K v IRA roll over or not?

Originally Posted by fatbrit View Post
And once they cut you a check in your name, the withholding is removed for the IRA and it's all taxable. Speed is indeed of the essence. And they don't usually do much to clearly explain the procedure so you have to work it out for yourself.
Aye, that's true, I'm supposedly getting the paper work from the finance people at the end of the month that should explain the options and will look into rolling into an IRA...
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Old Mar 17th 2008, 11:53 pm
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Default Re: 401K v IRA roll over or not?

Originally Posted by Bob View Post
Aye, that's true, I'm supposedly getting the paper work from the finance people at the end of the month that should explain the options and will look into rolling into an IRA...
They don't explain anything unless you speak weirdese. Have you decided where the money is going yet? It's usually best to get them to initiate the transfer since they have a vested interest in getting the money across for you.
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Old Mar 18th 2008, 12:41 pm
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Default Re: 401K v IRA roll over or not?

Originally Posted by Bob View Post
I haven't gotten the info yet, but now that I'm unemployed I think I should roll my 401K into an IRA? Anyway know the pros, cons and other implications or 401K and being dumped out of a job?

I don't think I had enough in there for it to be kept as a 401K anyway so it could be a moot point but as I'm not really up on all the pension shenanigans and have other things on my mind right now I thought I'd ask rather than have to google what all the options might mean once I get them...and speak in thicky terms
I've never done it, but from what I've heard it should be painless; just make sure you give the new IRA company all the details of your 401(k) plan, and whatever you do - do not accept a check from the 401(k) plan for deposit to the IRA, let the new company do everything.

I believe you have 30 days to complete the process.
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Old Mar 18th 2008, 2:49 pm
  #19  
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Default Re: 401K v IRA roll over or not?

Originally Posted by fatbrit View Post
They don't explain anything unless you speak weirdese. Have you decided where the money is going yet? It's usually best to get them to initiate the transfer since they have a vested interest in getting the money across for you.
I don't have an IRA set up yet, going to speak to someone where the missus works, give her a referal, apparently the finance bloke is quite nice

We'll see how this turns out.
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Old Mar 18th 2008, 4:53 pm
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Default Re: 401K v IRA roll over or not?

Originally Posted by anotherlimey View Post
I've never done it, but from what I've heard it should be painless; just make sure you give the new IRA company all the details of your 401(k) plan, and whatever you do - do not accept a check from the 401(k) plan for deposit to the IRA, let the new company do everything.

I believe you have 30 days to complete the process.
I have done it three times now and, while it would be nice if it worked exactly the way that you describe, it isn't always that simple.

Some companies will insist on mailing the check to you and you then have to give it to the holder of your rollover IRA, and no amount of yelling, screaming and pleading will persuade them to do otherwise.

At the end of the day, that doesn't really matter - what does matter is that the check is made out to the custodian of the IRA not to you personally.

btw what should ultimately happen with respect to taxes is that the company that held your 401K will send you a Form 1099-R at tax time next year. This will show the total amount of the distribution, the taxable amount as $0 and distribution code "G" in box 7a ("G" means "Direct rollover to a qualified plan"). You will report the amount of the distribution on line 16a "Pensions and Annuities" of Form 1040, and report the taxable amount as $0 on line 16b. TurboTax will do all of this for you, of course ...)
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Old May 6th 2008, 6:51 pm
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Default Re: 401K v IRA roll over or not?

I just thought I'd give an update on this, and this was the options I was given -

Turns out, if there was less than $1K in the 401K, they'd send you a cheque, no choice.

If between $1-5K, you've got 180 days to roll it into a IRA or another 401K, or they send you a cheque.

If over the $5K mark, you get a choice in what to do.
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