Left my employer, want to rollover 401K

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BogleMelon
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Left my employer, want to rollover 401K

Post by BogleMelon » Fri Apr 22, 2016 10:21 pm

Just left my current employer today, I haven't got the latest paycheck yet, so hypothetically what happens if I rolled over my 401K to IRA, before the latest paycheck kicks in and another contribution goes to my 401K? Will I be able to rollover again that last piece? Or how it works?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

rgs92
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Re: Left my employer, want to rollover 401K

Post by rgs92 » Fri Apr 22, 2016 10:33 pm

They will not let you rollover the money until you are legally separated from the employer's payroll (and usually a short settlement period after that), and that will not happen until your last paycheck is cut. So you just have to wait anyway.

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Watty
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Re: Left my employer, want to rollover 401K

Post by Watty » Fri Apr 22, 2016 10:35 pm

You will probably need to wait a few weeks. When I rolled my 401k into an IRA after I retired the 401k company verified that I was no longer employed there as part of the process. I doubt they will get then until after the last deposit is made.

You really would not want to do it twice even if you could. It is not unusual for the old 401K company to charge a $75 to $150 transfer fee so you don't want to pay that twice.

It is best to let the IRA company that you are rolling the money to walk you through the process to make sure that it is done right. If it isn't you could pay a lot of taxes and penalties and they might withhold 20% of the money too for taxes.

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FiveK
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Re: Left my employer, want to rollover 401K

Post by FiveK » Fri Apr 22, 2016 10:37 pm

Don't see why you couldn't, as some people hold onto their 401k for years after leaving an employer. Do you still have online access to your "old" 401k?

financial.freedom
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Re: Left my employer, want to rollover 401K

Post by financial.freedom » Fri Apr 22, 2016 10:57 pm

Would it be better to roll it into another 401k? If you roll it into an IRA then you will not be able to make contributions to Roth IRA (or backdoor Roth IRA) without avoiding the pro-rata rule.

If you don't have another 401k, you could leave there for awhile, do some 1099 or other side work to set up a solo-401k to roll it into, right? Anyone have thoughts on this? Would help me plan my eventual exit strategy as well...

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David Jay
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Re: Left my employer, want to rollover 401K

Post by David Jay » Sat Apr 23, 2016 9:54 am

financial.freedom wrote:Would it be better to roll it into another 401k? If you roll it into an IRA then you will not be able to make contributions to Roth IRA (or backdoor Roth IRA) without avoiding the pro-rata rule.

If you don't have another 401k, you could leave there for awhile, do some 1099 or other side work to set up a solo-401k to roll it into, right? Anyone have thoughts on this? Would help me plan my eventual exit strategy as well...
This depends on your income. I will never need to make a backdoor Roth because I will never earn enough to be subject to the phase-out limits.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

DoubleClick
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Re: Left my employer, want to rollover 401K

Post by DoubleClick » Sat Apr 23, 2016 10:44 am

Not to hijack the thread, but I have a related question. Once one leaves an employer, can one choose to execute the rollover at any arbitrary point in the future after that?

BogleMelon
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Re: Left my employer, want to rollover 401K

Post by BogleMelon » Sat Apr 23, 2016 12:33 pm

DoubleClick wrote:Not to hijack the thread, but I have a related question. Once one leaves an employer, can one choose to execute the rollover at any arbitrary point in the future after that?
I believe yes, not sure though if there is a time limit
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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