401k to IRA

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401k to IRA

Postby rcowlin » Tue Jan 29, 2013 6:38 pm

Am I required to roll-over or convert my employer 401k to an IRA of any type when I retire after age 61?

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Re: 401k to IRA

Postby mhc » Tue Jan 29, 2013 9:00 pm

You would need to read your plan documents or ask your plan administrator. The is no law that requires you to rollover your 401k. Your costs might change when you retire. It is important for you to research your particular plan. You should also consider the fund choices, costs, customer service, ... of your plan vs. IRA.

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Re: 401k to IRA

Postby scrabbler1 » Wed Jan 30, 2013 12:09 am

When I left my job in 2008, I had to empty my 401(k) because it had company stock in it which I was liquidating by using NUA (Net Unrealized Appreciation) to take the money using long-term cap gains rates. I was able to roll over the rest of the 401(k) to a traditional IRA.

If you don't have company stock in your 401(k) or if you have it but are not using NUA on it then I am pretty sure you don't have to liquidate the rest of the 401(k) the way I did.

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Re: 401k to IRA

Postby Duckie » Wed Jan 30, 2013 12:14 am

rcowlin wrote:Am I required to roll-over or convert my employer 401k to an IRA of any type when I retire after age 61?

It depends on your plan. Most plans allow a former employee to keep his 401k as long as there are enough assets in it. Some plans force you to close the 401k if you have less than $5K. See here. So you are "probably" not required to roll your 401k over. However it may be in your best interest to do so. Many 401k plans have expensive, limited options. An IRA somewhere gives you a huge amount of choices and in many cases lower expense ratios. But it depends on your plan.

You are definitely not required to convert pre-tax amounts to a Roth IRA.

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