Consolidating 401 k accounts speed dating for christians

30-Jun-2019 08:47

You should be able to merge old 401(k) plans into a new employer plan as long as it is permitted by the new employer plan.

And since the dollar amounts involved in 401(k) plans are often considerably larger than what they are for IRAs, it’s doubly important that you use the direct transfer method to avoid tax problems.

As long as you handle the transfer of your accounts correctly, the transition should be seamless, and both tax & penalty-free.

Please keep in mind that rolling over assets to an IRA is just one of multiple options for your retirement plan.

Under this method of transfer, you actually take possession of the funds from your previous plan — that is, the distribution of the plan funds are sent directly to you.

While this could be an excellent cover in the event that you don’t complete the rollover within the required 60 days, it comes with a set of complications all its own.

Other times, it can make your life more complicated, and you may want to merge some or all of the accounts into a single large account, where you can better keep track of your retirement investments.

Generally speaking, it’s easy to merge retirement plans, and to do so without incurring penalties.

Once you leave the second job, that 401(k) gets rolled over into its own IRA, and now you have three IRAs.

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Sometimes multiple IRAs develop based on the various incentives that are offered by individual IRA account managers, similar to the reasons why people often maintain savings and checking accounts with multiple banks.

Let’s say you have ,000 sitting in an IRA account, and the trustee issues a check for the proceeds directly to you.

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