Do You Want the Full Benefit of a 401k Rollover to an IRA (individual Retirement Account)
There are a few things that you should consider before you make a 401k rollover to IRA accounts of the traditional type. There are also some IRS rules that apply. Here's a look at how you can get the most benefit AND avoid tax consequences when converting a 401k rollover to an IRA account.
Often, the reason for making a 401k rollover to IRA accounts of traditional types is a job change, since, 401Ks are usually employer sponsored plans. You have two options for moving the fund; rollovers and transfers.
In rollovers, you are the "middle man". You contact the custodial company. They liquidate your assets and send you a check. It usually takes a week or so for liquidation. Your current custodian reports the transaction to the IRS.
You can only make one 401k rollover to an IRA (or any other rollovers, for that matter) per year and you have only 60 days to redeposit the fund with a new custodian, without jeopardizing the tax-sheltered nature of the fund and incurring taxes.
If you have already chosen a new custodian, you can contact them about completing a "transfer". Making a transfer instead of a 401k rollover to an IRA account may be advantageous.
Generally speaking, holdings within the account can be transferred to another account, so liquidation of assets is not necessary. Transfers are not reported to the IRS and if you realize that you have chosen the wrong custodian, you can make another transfer during the same year.
Actually, there is no limit to the number of transfers that you can make during a year's time, but custodians may charge penalties or other fees for completing the transaction. So, it is best to check out the company, ahead of time, to try and be sure that you will be happy with them.
If you are about to transfer a 401k rollover to IRA "traditional", you may want to consider self-investing, at this time. A truly self-directed account allows investors to get into the real estate market, which can be highly profitable and is more stable than the stock market. We are offering a real estate investment, where your ROI is guaranteed to be at least double the ROI of your traditional investments last year. YES, at least double your ROI from last year. I urge you to check this out as soon as possible
Right after you make a 401k rollover to an IRA, you are likely to have a large "cash" balance. With that cash "in-hand", so to speak, you could begin to learn about the housing market. Where the customers are and what properties they have to choose from. This is a good time to learn about all of your options, since you are about to make a change, anyway.
If you make a 401k rollover to IRA of a Roth type, you will be required to pay taxes on the fund, because contributions to Roth accounts are taxed as regular income, but qualifying distributions are tax-free. These are just some of the things to consider about a 401k rollover to an IRA. You can never learn too much, but hopefully, I have given you a few new ideas about how to successfully transfer a 401k rollover to IRA funds.
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Gordon Hall is an active participant of a national network of professional writers, who advocate socially conscious real estate investing, through the use of retirement vehicles such as IRAs, 401Ks and other retirement assets. For more information, or to get involved, please visit the following http://www.double-your-ira.com
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