Comments on: What to Do With My 401k After I Quit http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/ A personal finance blog where we share insights on carefully saving money, investing, early retirement, mortgages, stocks because the little things matter in achieving financial freedom! Sat, 21 Nov 2009 08:01:45 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: Mike Rowan http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-16436 Mike Rowan Sat, 06 Jun 2009 20:38:22 +0000 http://moneyning.com/?p=1174#comment-16436 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. 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 http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-15032 MoneyNing Sun, 05 Apr 2009 14:50:22 +0000 http://moneyning.com/?p=1174#comment-15032 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. 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 http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-15026 esthermasters Sun, 05 Apr 2009 11:29:13 +0000 http://moneyning.com/?p=1174#comment-15026 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. 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 http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-8820 sugitha Thu, 21 Aug 2008 06:07:41 +0000 http://moneyning.com/?p=1174#comment-8820 I don't have much knowledge about the tax and 401k, but I think this 401k is useful for our retirement life. I don’t have much knowledge about the tax and 401k, but I think this 401k is useful for our retirement life.

]]> By: hank http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-8814 hank Thu, 21 Aug 2008 01:32:08 +0000 http://moneyning.com/?p=1174#comment-8814 Roll it into the IRA is my vote! Better management, more funds, easy transfer, tax-friendly. No question if/when I quit for blogging. 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 http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-8806 Everyday Finance Wed, 20 Aug 2008 21:15:32 +0000 http://moneyning.com/?p=1174#comment-8806 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. 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 http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-8799 MoneyNing Wed, 20 Aug 2008 18:26:57 +0000 http://moneyning.com/?p=1174#comment-8799 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. 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 http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-8797 Steve Bonds Wed, 20 Aug 2008 18:13:00 +0000 http://moneyning.com/?p=1174#comment-8797 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. 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.

]]> By: Capital Couples Finance http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-8796 Capital Couples Finance Wed, 20 Aug 2008 18:08:57 +0000 http://moneyning.com/?p=1174#comment-8796 I was in your position just a few months ago and I thought I couldn't roll over into a Roth IRA without converting to a traditional IRA first, but I ended up being wrong. I just have to pay taxes on it this year. I went ahead opened the Roth because I have a relatively small balance now and it will cost me a lot less money than paying taxes on the distributions had I rolled it into a traditional IRA. I was in your position just a few months ago and I thought I couldn’t roll over into a Roth IRA without converting to a traditional IRA first, but I ended up being wrong. I just have to pay taxes on it this year.

I went ahead opened the Roth because I have a relatively small balance now and it will cost me a lot less money than paying taxes on the distributions had I rolled it into a traditional IRA.

]]> By: MoneyNing http://moneyning.com/401k/what-to-do-with-my-401k-after-i-quit/comment-page-1/#comment-8795 MoneyNing Wed, 20 Aug 2008 17:49:18 +0000 http://moneyning.com/?p=1174#comment-8795 Frugal Dad: Thanks :) It's great to know that someone acknowledges my plan. I don't remember the exact details but I remember something like 2009/2010 there's a way to roll them over more efficiently. I will have to look into it. I guess though that come 2009, my income will be lower without my primary job so it might make sense to do it next year. Frugal Dad: Thanks :) It’s great to know that someone acknowledges my plan.

I don’t remember the exact details but I remember something like 2009/2010 there’s a way to roll them over more efficiently. I will have to look into it. I guess though that come 2009, my income will be lower without my primary job so it might make sense to do it next year.

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