Comments on: What to Do With My 401k After I Quit

By: MoneyNing

MoneyNing — Wed, 02 Dec 2009 01:16:15 +0000

Although you can open a new one, I suggest rolling it into your existing traditional IRA to ease management. The last thing you want is too many accounts.

By: SandyRRT

SandyRRT — Tue, 01 Dec 2009 23:08:26 +0000

i rolled over a 401K into a traditional IRA 4 years ago when I quit a job. I will be losing my current job (4 years) due to a buyout. Do I need to roll my current 401K into my existing traditional IRA or can I/should I roll over into a different IRA account?

By: Mike Rowan

Mike Rowan — Sat, 06 Jun 2009 20:38:22 +0000

Well put!

Anytime you have to leave a job, your 401k should be a priority. I have heard horror stories about individuals who make the wrong moves, and this article lays out a few of the big nono’s.

By: MoneyNing

MoneyNing — Sun, 05 Apr 2009 14:50:22 +0000

esthermasters: If your 401k is with the employer you are still working with, you can delay withdrawals until you retire. However, if you have any funds in your IRA, you must make the minimum withdrawal when you turn 70 and a half.

As to where you put it in, it depends on how much you already have outside of retirement funds as well as how long you plan to work. If you have a solid savings, you might want to invest it in stocks and bonds. If you don’t, then maybe it’s finally time to build some savings.

By: esthermasters

esthermasters — Sun, 05 Apr 2009 11:29:13 +0000

Should you take your 401k out at 70 when you are still working. What do I put it in if I should and when do I have to start drawing it out.

By: sugitha

sugitha — Thu, 21 Aug 2008 06:07:41 +0000

I don’t have much knowledge about the tax and 401k, but I think this 401k is useful for our retirement life.

By: hank

hank — Thu, 21 Aug 2008 01:32:08 +0000

Roll it into the IRA is my vote! Better management, more funds, easy transfer, tax-friendly. No question if/when I quit for blogging.

By: Everyday Finance

Everyday Finance — Wed, 20 Aug 2008 21:15:32 +0000

Absolutely avoid just taking the cash and incurring the penalty. I know people that have done that and it’s been throwing it out the window in my opinion. It’s money that you set aside that you had no intention of touching, but then, just due to a life/career change, your Net Present Value decreased by 10%.

I’d roll over:

1) More control
2) Better investment options
3) Lower fees – Vanguard is best in the industry and many 401K plans don’t offer, so I assume yours doesn’t.

On the rollover Traditional vs. Roth, there are some considerations as to whether your income (and hence tax rate) will be higher in your working years or retirement years to offset paying the taxes now. The next election/Congress leaves some uncertainty as well. Tough call, I’d probably opt to do the traditional IRA rollover and incur no tax payments now.

By: MoneyNing

MoneyNing — Wed, 20 Aug 2008 18:26:57 +0000

Capital Couples Finance: Good to know! I will have to research on that and see whether it makes sense for me to go directly to a Roth IRA. The only thing for me to do this is that I’m going to have a much smaller income next year and I may be able to save more taxes next year.

Steve Bonds: I will seriously have to look into it. The income cap wouldn’t be a problem for me next year since I’m quitting my primary job and my biggest source of income.

By: Steve Bonds

Steve Bonds — Wed, 20 Aug 2008 18:13:00 +0000

Indeed, usually the most convenient thing is to do a direct rollover into a rollover IRA account, either pre-existing from previous 401(k) transfers, or a new rollover account. This is special and different from your regular IRA account. A direct rollover avoids the problem of coming up with 20% of your own cash.

You can now (2008) convert a rollover to a Roth IRA, but there are some income caps that are all to easy to reach, especially for a married couple since the limits are the same for single/married. In 2010 those limits vanish. More info on the above fairmark website.