Where should I roll over my 401k? I am with a new employer that does not offer 401k?
Leisa asked:
I am with a new employer that does not offer 401k but they are paying higher wages. They said they would be offering 401k this year. In the mean time, what should I do with my 401k? Do I leave it with the company that is already admistrating it or should I roll it over? Can I still make contributions to it? I am new at this. Any suggestions or comments would be greatly appreciated. Thanks!
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I am with a new employer that does not offer 401k but they are paying higher wages. They said they would be offering 401k this year. In the mean time, what should I do with my 401k? Do I leave it with the company that is already admistrating it or should I roll it over? Can I still make contributions to it? I am new at this. Any suggestions or comments would be greatly appreciated. Thanks!
April 16th, 2009 at 6:12 am
You can roll it over into an IRA. See any investment couselor, life ins agent,securities dealer, or branch manager of any local bank.
Be careful what you do, unless it is done right, there could be some serious tax ramifications. However, it is not all that difficult.
I would nott be concerned about adding to it, since your new employer will be offering a 401 later. But you can always ask when you talk to someone.
Who is your 401 with??? If you are uinsure who to deal with, call the local branch of the company who that 401 is with.,
Good luck in your new job!
April 18th, 2009 at 9:31 pm
Your 401k withdrawal options are as follows if you are under 59 ½
-Take a lump sum distribution, in which case your 401k plan provider will write you a check for the value of your account less a 20% withholding tax mandated by the IRS, and a 10% withdrawal penalty. The 20% tax that is withheld, but NOT the 10% penalty, will be counted against your income tax payable or will be counted towards any refund due for the tax year when you file your tax return.
-You can do nothing and leave it with your previous employer as long as the amount is greater than $5,000. Amounts less than $5,000 will usually be distributed to you, less a 20% withholding tax, regardless of you age. (Check with your plan sponsor)
-Do 401k rollover into an IRA or a solo 401k (if you are planning to open your own one person business)
April 20th, 2009 at 2:31 am
You can leave it where it is if you think it’s a decent plan.
If you want to roll it over, I highly recommend moving it to a low cost mutual fund house like Vanguard, Fidelity or T. Rowe Price, with Vanguard being the first choice.
Make sure when you do the rollover that it’s a Trustee to Trustee rollover. You should never actually get the money when doing this, otherwise you will encounter trouble with witholding and possibly penalties.