How to 401k Rollover Direct
If you have left an employer and there is money in a 401k account sitting with that employer, you can move that money to a new account with a direct rollover. Using the direct transfer from account to account maintains the tax-deferred status of your retirement money and avoids any tax withholding.
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Instructions
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Open a new account for your 401k money. The account can be an individual retirement arrangement or a 401k with a new employer.
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Obtain a rollover request form from your existing -- old -- 401k plan administrator.
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Complete the rollover request form with the new account information, and return the form to your existing 401k administrator. The two firms will complete the transfer of your 401k assets.
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Monitor the value of your new retirement plan account until the assets from the 401k have been transferred. A 401k direct rollover is a cash transfer, so you will need to make the mutual fund or other investments in the new account after the money is deposited.
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Tips & Warnings
Carefully select the provider of your new account if transferring your 401k into an IRA. You can choose from banks, mutual fund companies, insurance companies or stockbrokers. Check the fees and types of products offered.
If you are over age 70 1/2, you will be required to take a 10 percent distribution of the assets in your 401k plan before the money is rolled into an IRA.
