Recent trends show that most employees who move to another company have been opting for a 401K rollover. They find this option more preferable as employers now charge penalties for maintaining 401K accounts of ex-employees.
There are several advantages to a 401K rollover. The most important among these is that the tax-deferred feature of your 401K account is maintained, which is lost when the account is withdrawn and put into an IRA. You may rollover your old 401K account to a new one that may be hosted by your new company. But recently, more people have been opting for rollover IRAs for their 401K accounts instead. A reason for this is that there are more investment choices with an IRA. 401K plans hosted by employers often do not have as much options as a private IRA. Another advantage is that a rollover IRA would allow you the opportunity to convert your account to a Roth IRA account if you qualify for this based on IRS standards.
In selecting a 401k rollover to an IRA, you have to ensure that the rollover is done directly. With a direct rollover, your old 401k account balance would be transferred directly to your new IRA. A personal withdrawal of your 401K account could be subject to withdrawal penalties unless you deposit the money to your new IRA within 60 days.
Sadly, some employers are remiss in releasing their former employees' 401K documents in a timely manner. If you have this problem, you would be well advised to immediately get legal counsel.
In making the decision about what to do with your 401k account, it would be wise to carefully weigh all possible choices to find one that would be most profitable and most fitted to your goals.
There are several advantages to a 401K rollover. The most important among these is that the tax-deferred feature of your 401K account is maintained, which is lost when the account is withdrawn and put into an IRA. You may rollover your old 401K account to a new one that may be hosted by your new company. But recently, more people have been opting for rollover IRAs for their 401K accounts instead. A reason for this is that there are more investment choices with an IRA. 401K plans hosted by employers often do not have as much options as a private IRA. Another advantage is that a rollover IRA would allow you the opportunity to convert your account to a Roth IRA account if you qualify for this based on IRS standards.
In selecting a 401k rollover to an IRA, you have to ensure that the rollover is done directly. With a direct rollover, your old 401k account balance would be transferred directly to your new IRA. A personal withdrawal of your 401K account could be subject to withdrawal penalties unless you deposit the money to your new IRA within 60 days.
Sadly, some employers are remiss in releasing their former employees' 401K documents in a timely manner. If you have this problem, you would be well advised to immediately get legal counsel.
In making the decision about what to do with your 401k account, it would be wise to carefully weigh all possible choices to find one that would be most profitable and most fitted to your goals.
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